4 ms·
Ah, classic mistake here. If bargaining power is asymmetric between the insurer and the buyer, then the extra information is used for additional price discrimi
by VHRanger 3y ago
Ah, classic mistake here.
If bargaining power is asymmetric between the insurer and the buyer, then the extra information is used for additional price discrimination (eg. Its better for you if the picture is never taken regardless who you are).
So the question is: does the insurer or the insured have the bargaining power here? Competition helps, but is only one part of it.
Seeing that insurers seem very profitable in the US, a decent proxy for bargaining power, I'd argue this is a bad thing for the consumer.
- bvan 3y agoIf insurance was very profitable ‘in the US’, top-tier insurers would not be leaving states like Florida and California. There is a reason why they decide to no longer cover wildfire losses or hurricane losses. In the case of Florida, rampant fraud has turned the market into a basket-case.