4 ms·

I get what you're saying, though it is nuanced. For example, no insurance company in its right mind would insure a home in San Francisco against earthquake dama

I get what you're saying, though it is nuanced. For example, no insurance company in its right mind would insure a home in San Francisco against earthquake damage if the home isn't actually built to code in terms of its ability to withstand earthquakes. Similarly, car insurance companies charge way higher premiums for drivers with a history of accidents and tickets for reckless driving. My point being, yes insurance obviously decreases risk for owners, but since insurance companies are the ones inheriting that financial risk, they also inherit the incentive to ensure that things are being done the right way.

giantg2 1y ago
Not really. It does when it comes to stuff like code. But none of that address the larger and fancier homes than if they were not insured. Similarly, if other people are buying much more expensive cars, your liability insurance will increase even if your risk stays the same - the likelihood of occurrence is the same but the cost per occurrence is higher.