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You actually can’t insure everything. And you definitely can’t insure everything for less than the cost of just suffering the loss. There’s no viable or common

by CPLX 3y ago

You actually can’t insure everything. And you definitely can’t insure everything for less than the cost of just suffering the loss. There’s no viable or common policies that cover run of the mill retail shrinkage. It’s not a thing. Stores just have to eat it. Before you argue this point try to consider how such a policy could possibly work. You just total up what you think shoplifting is costing and tell the insurance company and they give you money? What business model is going on there exactly? How does the overall market work, where does the money come from that is reimbursing you for those losses?

trimethylpurine 3y ago
Risk is calculated on a per incident basis. Deductibles prevent frivolous claims. It's pretty simple really. There's no need to downvote just because you don't understand something. That's just petty.
- CPLX 3y ago
  You can’t insure repeated ordinary course of business losses that you have almost total control over and are a core part of your business function. You didn’t answer my question because it’s impossible to come up with a reasonable answer. In insurance the cost of losses is borne by people who did not suffer loss. So the cost of your car crash is borne by someone who didn’t have a crash. But they’re OK with it because they don’t know if and when it’ll happen to them. And an accident is a major loss, so they’d rather pay a little every month to avoid the uncertainty. But shoplifting is a week in and week out thing. If you have a shoplifting policy that’s reliably more expensive than the shoplifting why would you keep it? You wouldn’t because it’s not a thing. You can insure for major losses, robberies and burglaries and so on. But no retail stores can’t and don’t insure for things like someone driving off with a tank of gas, or pocketing an iPad, or a steak, or something. It’s not an insurable risk.
  - trimethylpurine 3y ago
    You're making a straw man argument. That it's inadvisable is something we already agree on. That it's impossible has nothing to do with that. It's POSSIBLE despite being inadvisable. Choose your words more carefully next time.
otteromkram 3y ago
If you make a claim, then your rates can go up because you're now a higher risk. This is one aspect of insurance aimed at discouraging fraud.
- CPLX 3y ago
  It has nothing to do with fraud. Even if every business is completely and scrupulously honest this kind of insurance policy is completely unworkable because it's not an insurable risk, it's just a cost of doing business. It's like trying to buy insurance to cover your monthly cost of airline travel. Like it's not a thing, that doesn't make sense.
bluGill 3y ago
You could insure that though. The cost of the policy would be higher than the cost of just eating the losses, but there are insurance companies willing to write the policy if you are stupid enough to pay for it. For things that happen all the time you are better off self-insuring it - that is eating the loss - than getting a policy. Insurance makes sense for rare events that are high enough loss that you would not want to self insure. Any common loss you should self insure, and the same for small losses. Only for larger losses that are not common are you better off with a pool of people who also might have that loss but probably won't - odds are one of you will but not all so you all limit your costs.
- CPLX 3y ago
  Yes that's my point. And since literally nobody wants a policy that reliably and predictably costs more than not having the policy it's not a thing. And since it's not a thing anyone wants insurers don't really have it. Yes somewhere there's like someone that might have something similar for sale, sort of. But the point of the comment is that in general businesses don't have it. I constantly see people say that retailers don't confront shoplifters because insurance will just cover it and it's not worth it. It's true they often don't, but not for that reason, since it's basically not ever insured short of a more extraordinary event.
  - bluGill 3y ago
    There are special insurance companies that will insure anything legal if you pay the price which they will figure out. As you say it wouldn't be cost effective, but it still exists if you want it anyway.

by CPLX 3y ago

trimethylpurine 3y ago

Risk is calculated on a per incident basis. Deductibles prevent frivolous claims. It's pretty simple really. There's no need to downvote just because you don't understand something. That's just petty.

CPLX 3y ago
You can’t insure repeated ordinary course of business losses that you have almost total control over and are a core part of your business function. You didn’t answer my question because it’s impossible to come up with a reasonable answer. In insurance the cost of losses is borne by people who did not suffer loss. So the cost of your car crash is borne by someone who didn’t have a crash. But they’re OK with it because they don’t know if and when it’ll happen to them. And an accident is a major loss, so they’d rather pay a little every month to avoid the uncertainty. But shoplifting is a week in and week out thing. If you have a shoplifting policy that’s reliably more expensive than the shoplifting why would you keep it? You wouldn’t because it’s not a thing. You can insure for major losses, robberies and burglaries and so on. But no retail stores can’t and don’t insure for things like someone driving off with a tank of gas, or pocketing an iPad, or a steak, or something. It’s not an insurable risk.
- trimethylpurine 3y ago
  You're making a straw man argument. That it's inadvisable is something we already agree on. That it's impossible has nothing to do with that. It's POSSIBLE despite being inadvisable. Choose your words more carefully next time.

otteromkram 3y ago

If you make a claim, then your rates can go up because you're now a higher risk. This is one aspect of insurance aimed at discouraging fraud.

CPLX 3y ago
It has nothing to do with fraud. Even if every business is completely and scrupulously honest this kind of insurance policy is completely unworkable because it's not an insurable risk, it's just a cost of doing business. It's like trying to buy insurance to cover your monthly cost of airline travel. Like it's not a thing, that doesn't make sense.

bluGill 3y ago

You could insure that though. The cost of the policy would be higher than the cost of just eating the losses, but there are insurance companies willing to write the policy if you are stupid enough to pay for it. For things that happen all the time you are better off self-insuring it - that is eating the loss - than getting a policy. Insurance makes sense for rare events that are high enough loss that you would not want to self insure. Any common loss you should self insure, and the same for small losses. Only for larger losses that are not common are you better off with a pool of people who also might have that loss but probably won't - odds are one of you will but not all so you all limit your costs.

CPLX 3y ago
Yes that's my point. And since literally nobody wants a policy that reliably and predictably costs more than not having the policy it's not a thing. And since it's not a thing anyone wants insurers don't really have it. Yes somewhere there's like someone that might have something similar for sale, sort of. But the point of the comment is that in general businesses don't have it. I constantly see people say that retailers don't confront shoplifters because insurance will just cover it and it's not worth it. It's true they often don't, but not for that reason, since it's basically not ever insured short of a more extraordinary event.
- bluGill 3y ago
  There are special insurance companies that will insure anything legal if you pay the price which they will figure out. As you say it wouldn't be cost effective, but it still exists if you want it anyway.