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> it's that the system that made mandatory the concept of insurance for a dignified, modern life You're talking like this is some kind of conspiracy theory, wh

> it's that the system that made mandatory the concept of insurance for a dignified, modern life You're talking like this is some kind of conspiracy theory, when there's not really any other way it could work. Banks will not give you a mortgage without home insurance, because then it would be an unsecured loan against an asset which would be worthless, with them eating the loss, if the house was destroyed. That's not sinister: nobody wants to loan against an ephemeral asset. And car insurance is mandatory because if you hit somebody, causing a million dollars of lifetime medical bills, and you don't have insurance, you've just fucked their life over with no possible recourse.

uoaei 3y ago
Assuming the structure of the current economic system follows some kind of inevitable (natural?) law is part of why you are unable to reason beyond the logic of the markets we contend with today. Markets have taken many different forms, have been entrusted with different sets of responsibilities to different degrees, over the course of economic history. Perhaps it makes more sense now to develop a fiscal institution to run insurance than to continue to rely on a market-based solution.
- pseg134 3y ago
  Well since your are the one proposing changes, what makes you think that a “fiscal institution” (whatever that is) would be more effective than the current market based solution. Don’t mention your feelings for extra credit.
- whalesalad 3y ago
  Nothing in life is free. There must be balance. Regardless of whether an insurance company is public or private these bedrock issues of “can we remain in the black?” will remain. A “fiscal institution” that is losing money on claims will fail. Plain and simple.
  - uoaei 3y ago
    Accounting is different when you're a government that issues its own currency. There is no such thing as losing "money" when such conditions exist. I didn't recognize the difference between fiscal and monetary policy until I appreciated this fact -- maybe it will help you too. The perspective then changes to losing domestic economic activity, which would surely occur if lives are ruined because their assets are destroyed before preparations have been made or eventualities prevented.
ryandrake 3y ago
What stops the bank from taking out their own policy and charging a higher interest rate on the mortgage to make up for it. Offer two interest rates: One rate for insured homes, one rate for uninsured homes. If that were offered, I'd definitely take the higher rate and choose to have the bank insure my home: Mortgage interest is tax deductible but home insurance isn't.
- lotsofpulp 3y ago
  Nothing stops them, but lenders are not necessarily in the business of lending money for homes and then collecting interest for 30 years. Lenders are mostly in the business of underwriting loans so that they conform to certain standards, such as those set by the government (fannie mae/ginnie mae/freddie mac/etc), and then selling them to the government after which their cash flows then get sold to investors looking for fixed income investments. So it might be too much work to for little return to step outside of this optimized system and custom design a mortgage product, especially when the alternative is government subsidized mortgages whose interest rates you will not be able to beat. >Mortgage interest is tax deductible but home insurance isn't. Since 2017, 90% of US tax filers do not itemize, and so they cannot deduct home mortgage interest.
  - ryandrake 3y ago
    > Since 2017, 90% of US tax filers do not itemize, and so they cannot deduct home mortgage interest. Wow, as someone who's been itemizing his whole life, that's astonishing if true. Learned something new today!
    - lotsofpulp 3y ago
      Due to the drastic increase in the standard deduction as part of 2017 Tax Cuts and Jobs Act. The standard deduction is scheduled to drastically decrease as of Dec 31, 2025, though.
- Analemma_ 3y ago
  Why would insurers provide insurance to the bank, but not you? The issue is the house, not who is paying for the policy.

uoaei 3y ago

Assuming the structure of the current economic system follows some kind of inevitable (natural?) law is part of why you are unable to reason beyond the logic of the markets we contend with today. Markets have taken many different forms, have been entrusted with different sets of responsibilities to different degrees, over the course of economic history. Perhaps it makes more sense now to develop a fiscal institution to run insurance than to continue to rely on a market-based solution.

pseg134 3y ago
Well since your are the one proposing changes, what makes you think that a “fiscal institution” (whatever that is) would be more effective than the current market based solution. Don’t mention your feelings for extra credit.
whalesalad 3y ago
Nothing in life is free. There must be balance. Regardless of whether an insurance company is public or private these bedrock issues of “can we remain in the black?” will remain. A “fiscal institution” that is losing money on claims will fail. Plain and simple.
- uoaei 3y ago
  Accounting is different when you're a government that issues its own currency. There is no such thing as losing "money" when such conditions exist. I didn't recognize the difference between fiscal and monetary policy until I appreciated this fact -- maybe it will help you too. The perspective then changes to losing domestic economic activity, which would surely occur if lives are ruined because their assets are destroyed before preparations have been made or eventualities prevented.

ryandrake 3y ago

What stops the bank from taking out their own policy and charging a higher interest rate on the mortgage to make up for it. Offer two interest rates: One rate for insured homes, one rate for uninsured homes. If that were offered, I'd definitely take the higher rate and choose to have the bank insure my home: Mortgage interest is tax deductible but home insurance isn't.

lotsofpulp 3y ago
Nothing stops them, but lenders are not necessarily in the business of lending money for homes and then collecting interest for 30 years. Lenders are mostly in the business of underwriting loans so that they conform to certain standards, such as those set by the government (fannie mae/ginnie mae/freddie mac/etc), and then selling them to the government after which their cash flows then get sold to investors looking for fixed income investments. So it might be too much work to for little return to step outside of this optimized system and custom design a mortgage product, especially when the alternative is government subsidized mortgages whose interest rates you will not be able to beat. >Mortgage interest is tax deductible but home insurance isn't. Since 2017, 90% of US tax filers do not itemize, and so they cannot deduct home mortgage interest.
- ryandrake 3y ago
  > Since 2017, 90% of US tax filers do not itemize, and so they cannot deduct home mortgage interest. Wow, as someone who's been itemizing his whole life, that's astonishing if true. Learned something new today!
  - lotsofpulp 3y ago
    Due to the drastic increase in the standard deduction as part of 2017 Tax Cuts and Jobs Act. The standard deduction is scheduled to drastically decrease as of Dec 31, 2025, though.
Analemma_ 3y ago
Why would insurers provide insurance to the bank, but not you? The issue is the house, not who is paying for the policy.