IS Forum
Forum Index Register Members List Events Search Today's Posts Mark Forums Read Help

Go Back   International Skeptics Forum » General Topics » Economics, Business and Finance
 


Welcome to the International Skeptics Forum, where we discuss skepticism, critical thinking, the paranormal and science in a friendly but lively way. You are currently viewing the forum as a guest, which means you are missing out on discussing matters that are of interest to you. Please consider registering so you can gain full use of the forum features and interact with other Members. Registration is simple, fast and free! Click here to register today.
Reply
Old 29th July 2022, 04:06 PM   #1
Thor 2
Philosopher
 
Thor 2's Avatar
 
Join Date: May 2016
Location: Tiny town west of Brisbane.
Posts: 7,075
Insurance Anyone?

There are a number of threads on the subject of insurance but non just asking: "What do you think about insurance generally, or per se."

I have pondered this and questioned others for their opinion with little result, and would be interested to hear from others here.

Personally I don't like insurance in principal and think it just has to be overpriced. I mean if some company is prepared to sell you cover for a risk, then the cover just has to be overpriced, or the company will trade at a loss.

There seems to be a common attitude among many, that to be insured for all manner of things is mandatory, and it is even immoral to be uninsured.
__________________
Thinking is a faith hazard.
Thor 2 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 04:17 PM   #2
theprestige
Penultimate Amazing
 
Join Date: Aug 2007
Location: The Antimemetics Division
Posts: 60,326
If you think insurance is overpriced, you can always set your own price, and put aside that much money every month, until you build up a fund to replace anything important you might lose in a car crash or a house fire or an ill-advised investment. The drawback is that you might lose something important before you amass the capital to replace it. The benefit is if never lose anything, you can spend the amassed capital as you wish.

Me? I find insurance policies to be the more convenient option. But I understand some wealthy people prefer to self-insure.

And no, I wouldn't say insurance is overpriced. Obviously the insurer has to make a living. You're giving him money to put into a pool against your future need, and you're paying him a reasonable fee for the service he's providing.

Do you think a hamburger is overpriced, just because you give the owner of the restaurant a little something in his pocket to take home at night? Cook your own hamburgers, then.

Do you consider taxi fares overpriced, because the driver gets enough to put a roof over his head and food on his table, instead of just enough to cover gas costs and the depreciation of his car?
__________________
There is no Antimemetics Division.
theprestige is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 04:53 PM   #3
Thor 2
Philosopher
 
Thor 2's Avatar
 
Join Date: May 2016
Location: Tiny town west of Brisbane.
Posts: 7,075
@ theprestige

By saying overpriced I meant compared to what the risk was worth to yourself.

Unlike yourself I have avoided insurance throughout my life, and I am sure I am well ahead. It is not necessary to put money aside as self insurance for some specific risk, just add more to your savings.
__________________
Thinking is a faith hazard.
Thor 2 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 05:01 PM   #4
lionking
In the Peanut Gallery
 
lionking's Avatar
 
Join Date: Jan 2007
Location: Melbourne
Posts: 50,612
I live in a fire prone area, so have no qualms about home insurance. Similarly with car insurance. If I’m at fault and hit an expensive car, it could be ruinous.

My most expensive insurance, though, is health insurance. Could I simply put aside the premium I pay and end up in front? Probably. Would I put it aside? Almost certainly not.
__________________
A fanatic is one who can't change his mind and won't change the subject.

Sir Winston Churchill
lionking is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 05:30 PM   #5
TragicMonkey
Poisoned Waffles
 
TragicMonkey's Avatar
 
Join Date: Jun 2004
Location: Monkey
Posts: 63,514
The pooling of risk makes sense, and I believe in the case of property insurance (and life insurance, for those with dependents) the cost is worth it: you are buying peace of mind that disaster will be coped with.

Health insurance, however, I don't think should be a thing. Because it's not a risk that you will have health issues at some point, it is an absolute certainty. Insurance is just tacking on extra costs and complications to an already complex field. I think it would be better ethically, financially, rationally, and politically to simply do away with health insurance and pay everyone's non-frivolous medical expenses collectively via taxation. If the government were the sole payor then it could certainly control prices -- it already regulates the hell out of what can be done medically, so why shouldn't it control the prices as well? The guarantee of certain payout is worth the discount from the provider perspective, and both as patients and providers we'll save by cutting out the middleman of insurance whose primary focus, let it not be overlooked, is to extract maximum profit by collecting as much money as they can while covering as little as they can get away with.
__________________
You added nothing to that conversation, Barbara.
TragicMonkey is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 05:52 PM   #6
marting
Illuminator
 
marting's Avatar
 
Join Date: Sep 2003
Posts: 3,368
All insurance has a negative ROI. Avoid things you can easily pay like appliancce and extended auto repair insurance.
__________________
Flying's easy. Walking on water, now that's cool.
marting is online now   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 06:23 PM   #7
Shalamar
Dark Lord of the JREF
 
Shalamar's Avatar
 
Join Date: Sep 2007
Location: Somewhere Else
Posts: 5,562
I have the 'typical' insurance: homeowners, car, and health.
I also have Earthquake insurance, and a policy for my Star Wars collection.
__________________

"The truth is out there. But the lies are inside your head."
Shalamar is online now   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 07:30 PM   #8
gypsyjackson
Graduate Poster
 
gypsyjackson's Avatar
 
Join Date: Jan 2014
Location: Kuala Lumpur, Malaysia
Posts: 1,499
Originally Posted by TragicMonkey View Post
The pooling of risk makes sense, and I believe in the case of property insurance (and life insurance, for those with dependents) the cost is worth it: you are buying peace of mind that disaster will be coped with.

Health insurance, however, I don't think should be a thing. Because it's not a risk that you will have health issues at some point, it is an absolute certainty. Insurance is just tacking on extra costs and complications to an already complex field. I think it would be better ethically, financially, rationally, and politically to simply do away with health insurance and pay everyone's non-frivolous medical expenses collectively via taxation. If the government were the sole payor then it could certainly control prices -- it already regulates the hell out of what can be done medically, so why shouldn't it control the prices as well? The guarantee of certain payout is worth the discount from the provider perspective, and both as patients and providers we'll save by cutting out the middleman of insurance whose primary focus, let it not be overlooked, is to extract maximum profit by collecting as much money as they can while covering as little as they can get away with.
I had never thought about it like this, perhaps because I grew up in a country which does this, and now have health cover provided by my employer. Thanks for this - you make a lot of sense.

Like Thor, I agree insurance is generally overpriced compared with my personal risk. It also irks me as someone who sometimes enjoys a bet that insurance is effectively gambling something bad will happen to me! A good example of this is the extra collision damage waiver a young guy tried to sell me on a rental car. It would have been £200 (or just under half my annual car insurance) against a £2000 excess - effectively saying I agreed there were 9-1 odds I would have a serious enough crash to justify it in those 8 days, despite never having such an accident in 22 years of driving.

I tend to take out insurance where what would have happened to me would have affected other people - life insurance, home insurance, car insurance. Paying for the service of not having to put money aside in various pots, even if the ROI isn’t profitable.
gypsyjackson is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 07:44 PM   #9
lionking
In the Peanut Gallery
 
lionking's Avatar
 
Join Date: Jan 2007
Location: Melbourne
Posts: 50,612
Originally Posted by TragicMonkey View Post
The pooling of risk makes sense, and I believe in the case of property insurance (and life insurance, for those with dependents) the cost is worth it: you are buying peace of mind that disaster will be coped with.

Health insurance, however, I don't think should be a thing. Because it's not a risk that you will have health issues at some point, it is an absolute certainty. Insurance is just tacking on extra costs and complications to an already complex field. I think it would be better ethically, financially, rationally, and politically to simply do away with health insurance and pay everyone's non-frivolous medical expenses collectively via taxation. If the government were the sole payor then it could certainly control prices -- it already regulates the hell out of what can be done medically, so why shouldn't it control the prices as well? The guarantee of certain payout is worth the discount from the provider perspective, and both as patients and providers we'll save by cutting out the middleman of insurance whose primary focus, let it not be overlooked, is to extract maximum profit by collecting as much money as they can while covering as little as they can get away with.
We have a universal health system in Australia which covers all urgent treatment. The problem arises when people require so-called “elective” surgery. These surgeries are very often completed to ease severe pain, like knee replacements, but not to save lives. Without private health insurance, you pay the very high full costs or you go on to a months or years long waiting list. With insurance it gets done. You also get private rooms and your choice of surgeon. That is good enough for me.
__________________
A fanatic is one who can't change his mind and won't change the subject.

Sir Winston Churchill
lionking is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 09:37 PM   #10
TragicMonkey
Poisoned Waffles
 
TragicMonkey's Avatar
 
Join Date: Jun 2004
Location: Monkey
Posts: 63,514
I suggest those who are retired or plan to retire and have any sort of savings and investments for retirement consider an umbrella insurance policy if such is available where you are. All it takes is one loon with a successful lawsuit to take away everything you have.

I am not a risk-taker when it comes to money. I am insured extremely well for property and liability, and have an additional umbrella atop those. Better to have it and not need it than to need it and not have it...
__________________
You added nothing to that conversation, Barbara.
TragicMonkey is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 09:48 PM   #11
The Atheist
The Grammar Tyrant
 
The Atheist's Avatar
 
Join Date: Jul 2006
Posts: 32,069
Originally Posted by Thor 2 View Post
There seems to be a common attitude among many, that to be insured for all manner of things is mandatory, and it is even immoral to be uninsured.
It's rightly compulsory for vehicles in most countries, but stupidly not here.

Having been wiped out by other drivers on 4 separate occasions, I'm well ahead in vehicle insurance. By its nature, most people lose overall on insurance.

I don't think it's immoral not to have insurance, but if your house burns down and you're not insured, starting a Gofundme and getting others to pay for it is.
__________________
The point of equilibrium has passed; satire and current events are now indistinguishable.
The Atheist is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 10:38 PM   #12
Little 10 Toes
Master Poster
 
Little 10 Toes's Avatar
 
Join Date: Nov 2006
Location: Directly above the center of the Earth
Posts: 2,527
Very generally speaking, other than health insurance, there's liability insurance and property insurance. What's your issue? It looks like you don't like people being responsible for their actions based off of the "There seems to be a common attitude among many, that to be insured for all manner of things is mandatory, and it is even immoral to be uninsured" comment.

Not trying to sound like a jerk, just curious.
Little 10 Toes is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 29th July 2022, 11:06 PM   #13
Lukraak_Sisser
Illuminator
 
Join Date: Aug 2009
Posts: 4,591
I was happy I had insurance when one of my upper neighbours in a shared apartment managed to set it on fire and cause tens of thousands of euros in damage.
Even taking all of the money I've paid to all my insurance so far I'm ahead and there was nothing I could have done to avoid that damage at the time.

It also showed me that accidents can happen, no matter how careful I am, and made me realize I cannot afford to replace my house and everything in it on my own. Sure, it's probably overpriced, but better safe than sorry.
Lukraak_Sisser is online now   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 12:10 AM   #14
lionking
In the Peanut Gallery
 
lionking's Avatar
 
Join Date: Jan 2007
Location: Melbourne
Posts: 50,612
One type of insurance we ended up very well ahead was pet insurance. Our dog had a horror two years of illness and injury which meant we ended up getting back many more times than what we paid.
__________________
A fanatic is one who can't change his mind and won't change the subject.

Sir Winston Churchill
lionking is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 01:57 AM   #15
Brainster
Penultimate Amazing
 
Brainster's Avatar
 
Join Date: May 2006
Posts: 19,079
Insurance is a bad deal unless you have a catastrophic loss, in which case it's a very good deal.
__________________
My new blog: Recent Reads.
1960s Comic Book Nostalgia
Visit the Screw Loose Change blog.
Brainster is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 01:58 AM   #16
Francesca R
Girl
 
Francesca R's Avatar
 
Join Date: Nov 2006
Location: London EC1
Posts: 18,807
Originally Posted by Thor 2 View Post
There are a number of threads on the subject of insurance but non just asking: "What do you think about insurance generally, or per se."
What I think about it is that it makes obvious sense to have the capability to unbundle (sell off) the risk of some activity or thing without having to forego the activity or thing.

Quote:
Personally I don't like insurance in principal and think it just has to be overpriced. I mean if some company is prepared to sell you cover for a risk, then the cover just has to be overpriced, or the company will trade at a loss.
As has been written already you could apply that principle to dissuade you from trading anything with any counterparty willing to trade with you. But the flaw with your logic is to implicitly assume your set of preferences is identical to theirs.

Quote:
There seems to be a common attitude among many, that to be insured for all manner of things is mandatory, and it is even immoral to be uninsured.
It's often viewed as immoral to default on an agreement but contract laws and liability don't turn on this aspect of it. I don't think it's immoral to fail to indemnify yourself (or others) against all possible downsides of everything.

In years past I used to use insurance as a counter argument to forum loonies who were adamantly opposed to fractional reserve banking and thought it was fraud on a grand scale. Such folks should never take out insurance on anything. (They should also never buy plane tickets or reserve tables at restaurants). But that's an aside

Last edited by Francesca R; 30th July 2022 at 02:17 AM.
Francesca R is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 02:12 AM   #17
Francesca R
Girl
 
Francesca R's Avatar
 
Join Date: Nov 2006
Location: London EC1
Posts: 18,807
Originally Posted by TragicMonkey View Post
Health insurance, however, I don't think should be a thing. Because it's not a risk that you will have health issues at some point, it is an absolute certainty.
Universal health care, Such as the British NHS, is still insurance, just like Cigna or Aetna in the states. The difference is who is providing it and how they are funded. I think there are significant reasons to prefer one model over the other, but that isn't really a view about health insurance per se, just the type of it.

Also while the ultimate need for health care costs is near certain for individuals (though I am sure some folks have lived to a ripe age and then died with no particular fuss), the size of those costs is very variable (risky), so insurance (diversifying the individual risk into a collective pool and not bearing it yourself) still makes the same sense as it does with houses burning to the ground.
Francesca R is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 02:15 AM   #18
Francesca R
Girl
 
Francesca R's Avatar
 
Join Date: Nov 2006
Location: London EC1
Posts: 18,807
Originally Posted by TragicMonkey View Post
Better to have it and not need it than to need it and not have it...
But best would probably be to not have it and not need it
Francesca R is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 02:25 AM   #19
Francesca R
Girl
 
Francesca R's Avatar
 
Join Date: Nov 2006
Location: London EC1
Posts: 18,807
Originally Posted by marting View Post
All insurance has a negative ROI.
You presumably mean ex ante. Although if you disagree with the risk assessment embedded in it it may not be. And even if you don't if you adjust it for your attitude to bearing risk it can have positive utility.
Francesca R is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 02:28 AM   #20
bluesjnr
Professional Nemesis for Hire
 
bluesjnr's Avatar
 
Join Date: Jun 2009
Location: Home.
Posts: 10,027
Originally Posted by lionking View Post
One type of insurance we ended up very well ahead was pet insurance. Our dog had a horror two years of illness and injury which meant we ended up getting back many more times than what we paid.
I'm at the other end of that story. Didn't insure my dog and she's got ongoing issues with her teeth, arthritis and luxating patella's in both back legs. Obviously, no pet insurance will touch her and I'm out thousands with no end in sight.

I dread the day that I may be forced to make a harsh decision based on financial outlay.
bluesjnr is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 02:35 AM   #21
lionking
In the Peanut Gallery
 
lionking's Avatar
 
Join Date: Jan 2007
Location: Melbourne
Posts: 50,612
Originally Posted by bluesjnr View Post
I'm at the other end of that story. Didn't insure my dog and she's got ongoing issues with her teeth, arthritis and luxating patella's in both back legs. Obviously, no pet insurance will touch her and I'm out thousands with no end in sight.

I dread the day that I may be forced to make a harsh decision based on financial outlay.
Yeah, you need to insure them when young and healthy.
__________________
A fanatic is one who can't change his mind and won't change the subject.

Sir Winston Churchill
lionking is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 02:35 AM   #22
Lplus
Graduate Poster
 
Join Date: Jul 2018
Posts: 1,176
Originally Posted by Thor 2 View Post
There are a number of threads on the subject of insurance but non just asking: "What do you think about insurance generally, or per se."

I have pondered this and questioned others for their opinion with little result, and would be interested to hear from others here.

Personally I don't like insurance in principal and think it just has to be overpriced. I mean if some company is prepared to sell you cover for a risk, then the cover just has to be overpriced, or the company will trade at a loss.

There seems to be a common attitude among many, that to be insured for all manner of things is mandatory, and it is even immoral to be uninsured.
"overpriced" depends entirely on how much profit you consider the insurance companies shoudl make on turnover. Clearly they need to make some profit as an incentive to remain in business, so incomings must be greater than outgoings (including operating costs)

As to insuring everything, it depends on how much it would cost to replace/pay for the unexpected event. For me, insuring a washing machine seems pointless since I could afford to replace it whereas insuring my house is vital.
__________________

Life isn't fair, Princess; anyone who says it could be is selling a political ideology.
Whinging on internet forums is the last resort of the powerless
Lplus is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 02:45 AM   #23
Francesca R
Girl
 
Francesca R's Avatar
 
Join Date: Nov 2006
Location: London EC1
Posts: 18,807
Originally Posted by Lplus View Post
"overpriced" depends entirely on how much profit you consider the insurance companies shoudl make on turnover.
Rationally it shouldn't depend on that at all, unless you are the insurance company selling it which I think you aren't. It should depend only on how much the premium is worth to you and how much removing (your best guess about) the risk is worth to you.

If it checks out as a good deal on those metrics then it's underpriced, to you.

You might still be able to pick it up for an even cheaper price from somebody else of course
Francesca R is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 02:55 AM   #24
Lothian
should be banned
 
Join Date: Apr 2002
Location: Earth, specifically the crusty bit on the outside
Posts: 17,592
All insurance is overpriced but so are cars, chocolate hobnobs and theatre tickets.

I insure things that would be devastating to me to lose. Kitchen kettles and the like, na.
Lothian is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 03:09 AM   #25
lionking
In the Peanut Gallery
 
lionking's Avatar
 
Join Date: Jan 2007
Location: Melbourne
Posts: 50,612
Originally Posted by Lothian View Post
All insurance is overpriced but so are cars, chocolate hobnobs and theatre tickets.

I insure things that would be devastating to me to lose. Kitchen kettles and the like, na.
We have house contents insured in case of fire or massive theft. We have, I think, a $200 excess (the amount deducted before the insurance kicks in) so we are only insured for major losses.
__________________
A fanatic is one who can't change his mind and won't change the subject.

Sir Winston Churchill
lionking is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 03:34 AM   #26
Francesca R
Girl
 
Francesca R's Avatar
 
Join Date: Nov 2006
Location: London EC1
Posts: 18,807
Originally Posted by Lothian View Post
Kitchen kettles and the like, na.
Yeah I agree. I could any day spot for another one of these if it went wrong. I'm thinking it should have Wi-Fi anyway so I may toss it out.
Francesca R is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 03:44 AM   #27
Darat
Lackey
Administrator
 
Darat's Avatar
 
Join Date: Aug 2001
Location: South East, UK
Posts: 103,221
Originally Posted by Francesca R View Post
Yeah I agree. I could any day spot for another one of these if it went wrong. I'm thinking it should have Wi-Fi anyway so I may toss it out.
That's fine for your everyday stuff but what about say a costly family heirloom?
__________________
I wish I knew how to quit you
Darat is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 03:50 AM   #28
Lothian
should be banned
 
Join Date: Apr 2002
Location: Earth, specifically the crusty bit on the outside
Posts: 17,592
Originally Posted by Francesca R View Post
Yeah I agree. I could any day spot for another one of these if it went wrong. I'm thinking it should have Wi-Fi anyway so I may toss it out.
That is way outside my affordability. The kettle fine, but the burner, I couldn't afford the fuel at today's prices.
Lothian is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 05:51 AM   #29
theprestige
Penultimate Amazing
 
Join Date: Aug 2007
Location: The Antimemetics Division
Posts: 60,326
Replacing a kettle is easy enough. Replacing an entire household after a flood or fire, not so much. Having a hundred grand in your pocket to re-equip a home can be nice, even if you're just using it to buy kettles and things.
__________________
There is no Antimemetics Division.
theprestige is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 06:34 AM   #30
jadebox
Master Poster
 
jadebox's Avatar
 
Join Date: Sep 2004
Location: USA
Posts: 2,261
Health insurance here in the US is just weird. As TragicMonkey said, it pays for things you certainly are going to need more than protecting you from uncertainty. So, it mostly works as a discount plan (like most Vision or Dental plans) where the insurance company has negotiated prices with the providers. This leaves people without insurance paying higher prices for the same services. It seems like an odd system - making the people who are less likely to be able to afford the care they need pay more.
jadebox is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 09:22 AM   #31
psionl0
Skeptical about skeptics
 
psionl0's Avatar
 
Join Date: Sep 2010
Location: 31°57'S 115°57'E
Posts: 19,328
Insurance is a form of gambling. You are betting with the insurance company that something bad will happen to you within a certain time frame. Of course, since the insurance company is the house, it will necessarily have the edge in this bet.

OTOH not having insurance is also a gamble. In many instances this is immoral if you don't have the funds to cover you if you are responsible in an accident (or the taxpayer is forced to bail you out because you can't otherwise afford a medical bill).

This is why things such as liability insurance on a motor vehicle or a taxpayer funded national health insurance scheme is usually considered mandatory.
__________________
"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975
psionl0 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 09:34 AM   #32
theprestige
Penultimate Amazing
 
Join Date: Aug 2007
Location: The Antimemetics Division
Posts: 60,326
Originally Posted by Thor 2 View Post
It is not necessary to put money aside as self insurance for some specific risk, just add more to your savings.
Money is fungible. It works out much the same, regardless of how exactly you organize the savings.

And do you do that? If you lost everything of value to you tonight in a house fire, would you have enough in savings to start over and make yourself whole again, for all the value you just lost?
__________________
There is no Antimemetics Division.
theprestige is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 03:26 PM   #33
wobs
Master Poster
 
Join Date: Oct 2011
Location: Hull
Posts: 2,702
I'm so glad I don't have a thatched roof on our house. The following discussion is on one of the other forums I go on occasionally, and is about insuring a house with a thatch roof, and the rebuild cost. Imagine having a thatched roof, and wood burning stove....
https://www.periodproperty.co.uk/for...6/#post-232809
__________________
"To vowels. They stop consonants sticking together like boiled sweets in a paper bag."
wobs is online now   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 03:38 PM   #34
Thor 2
Philosopher
 
Thor 2's Avatar
 
Join Date: May 2016
Location: Tiny town west of Brisbane.
Posts: 7,075
Originally Posted by TragicMonkey View Post
The pooling of risk makes sense, and I believe in the case of property insurance (and life insurance, for those with dependents) the cost is worth it: you are buying peace of mind that disaster will be coped with.

Buying peace of mind certainly, but there are many that don't seem to crave that.

Those that go in for risky sports for example. I would think it contradictory for a hang gliding enthusiast to insure his car, for example.


Quote:
Health insurance, however, I don't think should be a thing. Because it's not a risk that you will have health issues at some point, it is an absolute certainty. Insurance is just tacking on extra costs and complications to an already complex field. I think it would be better ethically, financially, rationally, and politically to simply do away with health insurance and pay everyone's non-frivolous medical expenses collectively via taxation. If the government were the sole payor then it could certainly control prices -- it already regulates the hell out of what can be done medically, so why shouldn't it control the prices as well? The guarantee of certain payout is worth the discount from the provider perspective, and both as patients and providers we'll save by cutting out the middleman of insurance whose primary focus, let it not be overlooked, is to extract maximum profit by collecting as much money as they can while covering as little as they can get away with.

To a large extent that is how it is in Australia.

I spent over a month in a public hospital (most of it in intensive care) 30 years ago, and it didn't cost me a cent. If I had been insured I could not have received better care.
__________________
Thinking is a faith hazard.
Thor 2 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 03:48 PM   #35
Thor 2
Philosopher
 
Thor 2's Avatar
 
Join Date: May 2016
Location: Tiny town west of Brisbane.
Posts: 7,075
Originally Posted by theprestige View Post
Money is fungible. It works out much the same, regardless of how exactly you organize the savings.

And do you do that? If you lost everything of value to you tonight in a house fire, would you have enough in savings to start over and make yourself whole again, for all the value you just lost?

"To make myself whole again?" ..... yes I think so.

Mind you I don't need much anymore at my stage of life. I think probably I had more funds when younger, and could enjoy the use of it, as a result of not spending lots of money to obtain security.
__________________
Thinking is a faith hazard.
Thor 2 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 03:52 PM   #36
Thor 2
Philosopher
 
Thor 2's Avatar
 
Join Date: May 2016
Location: Tiny town west of Brisbane.
Posts: 7,075
Another thing the un-insured avoids is the frustration of fighting with insurance companies, to get the money they paid good money for.
__________________
Thinking is a faith hazard.
Thor 2 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 04:06 PM   #37
lionking
In the Peanut Gallery
 
lionking's Avatar
 
Join Date: Jan 2007
Location: Melbourne
Posts: 50,612
Originally Posted by Thor 2 View Post
Another thing the un-insured avoids is the frustration of fighting with insurance companies, to get the money they paid good money for.
This is not my experience at all. Provided you have evidence of loss and damage and the claim meets the conditions of the policy, you will get paid.

Successful insurance companies know how to set premiums. They know that they will collect more fees over time than they will pay out. They will not waste money fighting valid claims.
__________________
A fanatic is one who can't change his mind and won't change the subject.

Sir Winston Churchill
lionking is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 06:09 PM   #38
Roger Ramjets
Philosopher
 
Roger Ramjets's Avatar
 
Join Date: Jun 2008
Posts: 5,884
Originally Posted by psionl0 View Post
Insurance is a form of gambling. You are betting with the insurance company that something bad will happen to you within a certain time frame. Of course, since the insurance company is the house, it will necessarily have the edge in this bet.
Unless it doesn't.

Insurance companies don't just sit on the premiums you pay them, they invest it - often in risky markets. Then they calculate that only a small proportion of it will have to be payed out in claims. In this way they are like banks, except that they never have to worry about being subject to a 'bank run' - but they can be wiped out by an unusually large amount of claims.

So what do they do about it? Why the obvious thing of course - buy insurance to cover the risk!

Quote:
OTOH not having insurance is also a gamble. In many instances this is immoral if you don't have the funds to cover you if you are responsible in an accident (or the taxpayer is forced to bail you out because you can't otherwise afford a medical bill).
What's really immoral is being given the freedom to decide for yourself how best to spend your money, then being accused of immorality for doing it.

Quote:
This is why things such as liability insurance on a motor vehicle or a taxpayer funded national health insurance scheme is usually considered mandatory.
All insurance is socialism. Private insurance is worse because the insurers are only interested in profiting from it as much as possible. Private insurance that people are forced to buy is worse again. Private insurance that people are forced to buy to avoid being accused of immorality is the worst.
__________________
We don't want good, sound arguments. We want arguments that sound good.
Roger Ramjets is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 06:30 PM   #39
psionl0
Skeptical about skeptics
 
psionl0's Avatar
 
Join Date: Sep 2010
Location: 31°57'S 115°57'E
Posts: 19,328
Originally Posted by Roger Ramjets View Post
- but they can be wiped out by an unusually large amount of claims.
Having the edge in gambling doesn't mean that the house is immune to a losing streak.

Originally Posted by Roger Ramjets View Post
What's really immoral is being given the freedom to decide for yourself how best to spend your money, then being accused of immorality for doing it.
If you are negligent in a motor vehicle accident, cripple somebody for life and don't have the funds to pay for their care then you are immoral.
__________________
"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975

Last edited by psionl0; 30th July 2022 at 06:33 PM.
psionl0 is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 30th July 2022, 06:33 PM   #40
lionking
In the Peanut Gallery
 
lionking's Avatar
 
Join Date: Jan 2007
Location: Melbourne
Posts: 50,612
Originally Posted by psionl0 View Post
Having the edge in gambling doesn't mean that the house is immune to a losing streak.


If you are negligent in a motor vehicle accident, cripple somebody for life and don't have the funds to pay for their care then you are immoral.
Yes, agreed.
__________________
A fanatic is one who can't change his mind and won't change the subject.

Sir Winston Churchill
lionking is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Reply

International Skeptics Forum » General Topics » Economics, Business and Finance

Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -7. The time now is 07:52 AM.
Powered by vBulletin. Copyright ©2000 - 2022, Jelsoft Enterprises Ltd.

This forum began as part of the James Randi Education Foundation (JREF). However, the forum now exists as
an independent entity with no affiliation with or endorsement by the JREF, including the section in reference to "JREF" topics.

Disclaimer: Messages posted in the Forum are solely the opinion of their authors.