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I'm less concerned about the spying and more concerned about insurance companies arbitrarily non-renewing policies with no recourse for the consumer. Insurance
by landedgentry 2y ago
I'm less concerned about the spying and more concerned about insurance companies arbitrarily non-renewing policies with no recourse for the consumer. Insurance is heavily regulated for good reason, and insurance should be a source of stability instead of anxiety.
- otteromkram 2y agoBut, profits. How else are execs going to pay for that third vacation home?
- dylan604 2y agoDoes that third vacation home get spied on from the sky as well?
- reactordev 2y agoI’m sure it does but he knows Bob and Bob can just flip a bit in a database to make it “compliant”.
- dmoy 2y agoDo you live in CA? In recent years that's the majority of arbitrary cancellations I've heard about - companies pulling entirely out of CA.
- bluejekyll 2y agoSimilar reports are coming out of Florida. Generally, it seems the industry is pulling away from higher risk to climate change issues from larger storms or fire risk.
- dmoy 2y agoYea I think that is exactly correct
- tfehring 2y agoThere’s a saying in the insurance industry, there’s no such thing as a bad risk, only insufficient premium. Natural catastrophe risk is definitely increasing, but the insurance industry can handle that. The fundamental issue is that regulators in many states (including CA and FL) won’t let insurers charge enough to compensate for that risk.
- rufus_foreman 2y agoThat's not the issue in Florida. The issue in Florida is that "although Florida only accounts for 9 percent of the country’s home insurance claims, it is home to 79 percent of the country’s home insurance lawsuits". That's from https://www.bankrate.com/insurance/homeowners-insurance/florida-homeowners-insurance-crisis/ https://www.bankrate.com/insurance/homeowners-insurance/flor..., which explains how the roofing scams work in that state. The legislature is working on it.
- howard941 2y agoThe legislature already worked on it. It had its way with it, totally. Despite the "work" that was done rates have skyrocketed. We're so deregulated there's no room for any additional work that doesn't break down the front door and walk out with stuff What's actually happening in Florida is the insurance companies are Janus entities. One part is an insurance company that's subject to rate regulation and the other part is a consulting firm that gets paid large sums of money from the regulated company and that's where all the profits live.
- HDThoreaun 2y agoWhat do you expect when the market collapses and most suppliers leave? Of course everyone else will raise their prices. Now Florida needs to wait for insurers to come back and competition will happen.
- hn_throwaway_99 2y agoI 100% agree with landedgentry. I don't really have any problem with insurers using drone photos - anyone can take drone photos of anyone else's property - and I'm not really a fan of the article calling it "spying" to imply some special kind of nefarious behavior. But I do think the total bullshit is that companies are just using it to come up with essentially fake reasons to drop customers: > Cindy Picos was dropped by her home insurer last month. The reason: aerial photos of her roof, which her insurer refused to let her see. ... Her insurer said its images showed her roof had “lived its life expectancy.” Picos paid for an independent inspection that found the roof had another 10 years of life. Her insurer declined to reconsider its decision. I also don't have a problem if an insurer decides to leave a state entirely - that decision is essentially saying the state has made it impossible for them to adequately price risk, and that's something the state should fix if so desired. But these BS cancellation reasons seem like a case of insurers wanting to have their cake and eat it too. I'm not very familiar with state-by-state insurance law, but I'm assuming they have to come up with some reason to drop a homeowner that already has a policy, so this looks like they're trying to find BS reasons to just drop potentially less profitable parts of their portfolio.
- halfcat 2y agoWhy aren’t insurance companies required to operate like market makers in the equities markets, where they’re free to choose the price they’re offering, but must offer a price in the market they’re in? If the roof needs replacing (in the insurance company’s view) then charge whatever the rate is that covers that and still makes them a profit. Don’t just deny coverage.
- overstay8930 2y agoThey will just charge the customer the price of a new roof, there’s no point in what you’re asking for.
- rybosworld 2y agoIf you ever look at the options chain on a thinly traded equity, you'll notice small volume and very large bid/ask spreads. Sometimes the bid/ask spread is so large that it looks like a computer glitch. The primary insurance market is even more illiquid than thinly traded options.
- nradov 2y agoIn some states it's the heavy regulation which is causing policy non-renewals. When governments fix prices below the market rate that inevitably leads to shortages. It's a stressful situation for many property owners. They may not realize the impact that recent high inflation has had on repair costs, especially when prices tend to spike up higher after major disasters.
- upofadown 2y agoThis sort of opportunity to find a rationale for cancelling an individual insurance policy will inevitably by used for evil. See: Insurance Redlining.
- reactordev 2y agoOr you thought cancelling cable was hard now…
- danielmarkbruce 2y agoNo one, including companies, should not be forced into contracts they don't want to enter into. In practice, you are going to find they are never arbitrarily doing it. They are doing it because the price no longer covers the cost of providing the insurance. Just like when I decide the price of X isn't worth it anymore, I stop doing the transaction. The reasonable response would be to increase the price, but in some situations it's not possible due to regulation.
- j45 2y agoExcept when those companies have lobbied to create laws to make the use of their industry mandatory.
- Analemma_ 2y agoI could be wrong, but I don't think there are any states where you are required by law to have home insurance. The issue is that banks won't underwrite a mortgage for an uninsured house, because without insurance it's a completely unsecured asset whose value would go to zero at any time. (And if a bank won't write a new mortgage for it, the value drops dramatically even if it's already paid off, because now the potential market is limited to cash-only buyers for a risky asset) You're free to go without insurance on a house that you own, but so long as the bank owns it, they're going to make insurance mandatory, and that has nothing to do with lobbying.
- epolanski 2y agoYou are not wrong at all. Home insurance isn't mandatory, but refinancing your mortgage is impossibile without one.
- marcosdumay 2y ago> whose value would go to zero at any time No, it wouldn't. It would go down to the value of the land (where a construction is permitted). Nowadays, that's often more than 90% of the price.
- VHRanger 2y agoThats exactly the problem with insurance. If I have any sort of risk mitigation (file backup, fire alarms, spare tire, a generator, whatever) I can test that it works periodically. So I know I'm actually safe for the event. For insurance, you can't know what bullshit they'll come up with to deny a claim when the time comes for it. You're left with having paid for the insurance all that time for nothing! Much better to have put that money in a piggy bank instead.
- ametrau 2y agoWell technically you were paying for their obligation to pay for you. Which is a real thing of value.
- bvan 2y agoYou assume it’s bullshit. Difference.
- treflop 2y agoI’ve known plenty of people who had legitimate accidents not of their own fault where insurance made them more than whole, and they would have not been able to afford the replacement if they had simply been saving for the same amount of time. If you actually feel like you could recoup of the cost of paying for insurance by instead keeping the money in a piggy bank, you are buying too much insurance. There’s a sweet spot for insurance and overpaying for too little insurance is a you-problem.
- FireBeyond 2y ago> I’ve known plenty of people who had legitimate accidents not of their own fault where insurance made them more than whole And I know plenty of people myself, who had legitimate accidents not of their own fault who were left $10-15K out of pocket after insurance and settlements. Let's start with a car that was two years old, I owed $22K on. Car was totaled and most of the comps from the insurer was $25-28K. Oh good, says I. And then they find one 150 miles away that is $13,500. This drags the value down to about $20K. While there's obviously something wrong with this entry, "Doesn't say salvage title in the ad, so it's a valid comp". It takes them over a month to figure this out, all the while they have me in a rental, and then try to tell me that they're only covering one week of rental coverage. Had to threaten to sue to get compensation for my injured wrist/arm (which was hyperextended when the airbag went off as I was holding the steering wheel). I still ended up losing out on $6K 'equity' in my car, having to come up with another downpayment, and months of calls from various medical providers who were having a hard time getting my insurer to pay their bills. For another driver who ran a stop sign, t-boned me, and whose insurance had admitted 100% liability within 48 hours.
- brogrammernot 2y agoAlright, I spent years working and building 0-1 insurance products. Let me peel back some stuff that’s been happening behind the scenes. Some officials are elected and some are appointed which all depends on the state. Appointed officials are usually more reasonable and elected are not because higher rates = mad voters = re-election chances lower. For a long time, insurers have struggled to get sufficient rate changes approved. A literal quote for you during Covid was, “Son, I’m looking out my window at downtown {city} and I don’t see many cars on the road. We won’t approve the rate increases.” This was with actual data of losses increasing due to supply chain disruption of auto parts, labor increases and many more things. We basically had to write policies and hope for the best despite knowing the data / trend lines forecasting major losses. Fast-forward and what do you have - major losses by all of these companies - and so these companies have two choices: - Try to get rate approvals - Exit the market or line of insurance For California, the latter is the better option because at least for auto you cannot use credit, telematics or other very predictive attributes to price the risk. This results in essentially pooled risk which in aggregate drives up rates for all. Simply put, California officials did this to themselves. For other states, the first option works but the rate increases are now significantly higher because it was near impossible to get any adequate rate increases last few years. So, the bill has come due and it sucks for everyone as it’s either a) higher prices or b) can’t get insurance (Florida folks for certain types) or c) limited suppliers not being able to get reinsurance to share the risk results in higher rates that customers can’t afford so they go without.
- pishpash 2y ago[flagged]
- deleted 2y ago[deleted]
- brogrammernot 2y agoThanks for the insightful and thought-provoking comment.
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- Analemma_ 2y agoI'm not usually a "actually this is the fault of regulation" sort of person, but in this case it really is the fault of regulation. A bunch of states have laws saying premiums can't rise more than X% in a year, or can't rise at all without the approval of the state insurance commissioner. If circumstances have changed (e.g. wildfire or hurricane risk is now worse than we thought, and also labor market tightness and inflation means repairing/rebuilding is much more expensive) such that the insurance company can't insure you profitably without a rate hike they're forbidden to do, then of course they're going to drop your policy.
- epolanski 2y agoNobody can be forced to insure you if they don't want to. I learned that on CNBC the other day, here's the segment talking about the state of home insurance in US. https://www.youtube.com/watch?v=xw8fpEpwMzA https://www.youtube.com/watch?v=xw8fpEpwMzA
- Waterluvian 2y agoCan’t really force people to do business like that… What you can do, which the U.S. already does, is government-run insurance, socializing the losses among a population. Flood insurance, for example.
- colechristensen 2y agoI don’t think insurance companies should be forced to protect you from your own outsized risk taking at a government capped price.