Drivers: Don’t allow insurance companies to use speed camera data. We don’t want bad drivers to pay more.
Also drivers: Insurance premiums are too expenvie. Do something.
Governor: 🙆
The same moron that wants 3d printer manufacturers to come up with a way to detect the printing of gun parts? Half the receivers for guns you can print are boxes
Government provided healthcare would lower insurance premiums.
Can New York get just one governor who isn’t a fucking enemy of the people?
So basically what she’s saying is insurance rates are going to stay the same, but if you get hurt in the car wreck you’ll get less? That’s her great plan? Why does she have to suck so much?
The same governor that gave a billion dollars of taxpayer money to billionaires to build a head injury stadium. Not surprising.
Why is it that something required by the government (car insurance) is not provided BY the government?
Some states do provide/sell insurance as an “insurer of last resort” for those who can’t get insurance on the private market due to being horrible uninsurable drivers.
Probably would be better if those people just weren’t driving but this is america where driving is an unalienable right.
Because it’s not required by the government. I don’t have any, for example, because I don’t own a car.
We already spend too many trillions of dollars subsidizing private cars. No more please.
$$$$$$$$$$$$$
PPP
This is an example of why is a Capitalist Governor, an example of why she is a member of a 90+% Capitalist political party.
Just keep blaming your voters from not voting for your members & deny the obvious Capitalist actions those politicians you want your voters to voter for, & history will eventually blow you away. The question is will The Living Planet & All Living Being, including Us (even those of Us, who are no longer apart of either Capitalist Parties) go extinct with you?
I never understood different rates for different insurance risk profiles.
The whole point of insurance is agrigate risk. Risk based rates work against that idea, defeating the purpose of insurance.
That’s because you misunderstand the purpose of insurance.
The purpose of insurance is to provide stability.
That is, instead of paying a lot of money with a low frequency, you pay a small amount of money with high frequency.
Of course, as the provider of that “stability service”, you pay the insurance company.
Note that at no point in this definition is more than one customer necessary.
Each customer has a different definition for “a lot of money” (X), “small amount of money” (Y), “high frequency” (Z). “Low frequency” is usually a month or a year though.
Customers “control” variables X and Z. Insurance companies control Y. For simplicity let’s say A = X*Z.
In an ideal market, each customer would accept the policy where Y is highest.
In your view, insurance policies should have constant Y.
If you make an insurance company based on that, you have 2 options:
- Set a low Y, you’ll go bankrupt.
- Set a high Y, you’ll go bankrupt.
In scenario 1. You’ll go bankrupt because your customers will be the ones with the highest A in the market. Since low A customers will go to another company that sets Y as a function of A.
In scenario 2. You’ll go bankrupt because you’ll have no customers. Setting a Y high enough so scenario 1. Doesn’t happen means that not even the highest A will be willing to pay your high Y.
If you see it from the PoV of the customer:
Why would I pay the same as my neighbour that drives drunk every day when I only use my car once a years on a small trip while following every traffic law and regulation? I’ll just go to that other insurance company that costs only a small fraction of my neighbour’s.
All of that is about a company selling a product in a market.
But insurance doesn’t need to be that. It’s purpose is unrelated to any of that.
Insurance, no matter where it comes from, is about pooling money from a large group to cover the losses of a small group. It exists because nobody knows which group they’ll be in.
EDIT:
Ideally insurance would be a state regulated monopoly, in order to have the largest possible pool. That would be the most effective and efficient way of doing it.In fact trying to categorize people into lower and higher risk pools, just makes smaller pools. Which hurts the overall efficiency of insurance for the purpose of creating more attractive products to sell in a profit driven market. It’s an example of how commerce itself can actually hurt some markets.
What you describe as an individual spreading out small payments instead of having one large payment, is actually just a loan. You can open a line of credit at a bank for emergencies. That does the same thing. It isn’t insurance.
I agree a state monopoly on insurance would probably be beneficial but that doesn’t mean we have to get rid of different rates. Riskier drivers need to pay more because they’re more likely to take money out of the system. This doesn’t mean they have to go into a higher risk pool, it could be just one big pool but balancing money in and money out fairly will require different rates. It’s unfair to charge a person who barely drives their 10 year old car the same price as a 16 year old with a Porsche, one of those people is way more likely to have an accident, and a costly one at that, and take out more money from the pool and thus get disproportionate “benefit” for the same price.
Riskier drivers need to pay more because they’re more likely to take money out of the system.
They don’t need to pay more. It just feels more fair that way, on an individual short term basis.
But when thousands or millions of people are all pooled together, the individual difference in risk gets flattened out to be practically negligible.
To your example of the 16yo with a Porche. When you’re young, you get car insurance for cheap. Then as you get older, you pay the same while you’re risk that day/month/year goes down. But after your whole lifetime, in the end it’s all the same.
No. Pooling the resources of all to spend it on the benefit of society (including helping the less-fortunate) is the purpose of taxes.
The purpose of insurance is to trade low chance big impact risks for 100% chance small costs.
As I said, you can have insurance with just one insurer and one insuree. You cannot have taxes with 1 taxpayer and 1 tax collector, that would be called an asset manager or something, where you pay someone to decide for you what to spend that money on.
Merriam-Webster:
1 a : coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril b : the business of insuring persons or property c : the sum for which something is insured 2 : a means of guaranteeing protection or safety The contract is your insurance against price changes. Frequent hand washing is good insurance against the common cold. 3 gambling : a side bet that a player in blackjack may place when the dealer’s first faceup card is an ace
Note: An insurance bet can be up to half of a player’s original bet. It wins at 2 to 1 odds if the dealer’s cards add up to 21.
Pooling the resources of all to spend it on the benefit of society (including helping the less-fortunate) is the purpose of taxes.
That’s not what I said or meant.
The purpose of insurance is to trade low chance big impact risks for 100% chance small costs.
For an individual, yes.
But how does an insurer do that? By pooling the low chance risk from lots of individuals into a certainty, so it’s predictable. The bigger the pool the more predictable things become.
If there was only one person in the world who wanted insurance, nobody would know how to predict or price it. It wouldn’t work.
Again. You are confusing purpose with implementation.
The purpose is what I stated. The implementation is irrelevant. You claim that insurance is insurance only if it is implemented the way you explain. However, as I tried to explain, you can provide insurance without having a large pool of insurers.
Look at this example:
Alice has a tomato farm and wants to buy a goat from Bob. They reach a price of 20 tomatoes for a goat.
However, they live in different villages. Alice pays 2 tomatoes to Charlie to pay for transport. But Alice is worried that bandits will steal the tomatoes or goat from charlie while the transportation is happening.
So Charlie offers Alice this deal: “give me 4 tomatoes instead of 2, and you will receive a goat, even if the goods get stolen in transport”.
That is insurance.
Why can Charlie offer such a thing? That’s just the implementation, it doesn’t matter. But here are a few possibilities:
- Charlie calculated the chances of getting robbed, and calculated that after many insured transports, the value of the insurance payment will be greater than the value of the insured goods.
- Charlie is very confident in himself and has never been robbed. He accepts the risks, and if he does get robbed, he’ll make sacrifices to get another goat.
- Charlie paid a cheaper insurance, easy low-risk profit.
- Charlie has plenty of goats, and is willing to lose one of them to strengthen his ties with Alice.
- Charlie does plenty of safe transports with a higher-than-normal insurance price, so even if he is robbed this time, he has enough of apples stored to pay for another goat. (This is the one you are saying)
About your last claim:
Nobody “knows” how much insurance is worth. Insurance companies pay lots of money to obtain data and make calculations about predictions. But it’s all statistics. The more data there is, the more accurate the price can be. Companies that make good predictions stay afloat, while bad predictions makes them lose money.
But that goes for absolutely every product. There is no global entity that dictates the prices of products as an absolute fact.
You cannot have an insurance company with a single regular customer the same way you cannot have an iphone shop with a single regular customer.
But the concept of insurance is not only for insurance companies.
You can sell a single instance of insurance to a single customer like you can sell a single instance of an iphone to a single customer.
You can see at what price others are selling similar insurance policies and set your price like that. Or you can set the price with a big benefit margin to compensate for the higher risk you are incurring when selling insurance while having little data.
The purpose is what I stated.
I never said purpose. You did. Originally I said “the point of insurance”.
What you describe is no different than two people making a bet. Making a bet isn’t insurance.
Insurance is different only because of the large organization on the other side making countless bets at scale.
It’s almost as though you’re refusing to consider the larger context, because:
Nobody “knows” how much insurance is worth. Insurance companies pay lots of money to obtain data and make calculations about predictions.
My claim was predicted on nobody else in the world wanting insurance. Insurance companies wouldn’t exist. The concept of Insurance wouldn’t exist. That research and data wouldn’t be done. For that first person and whoever is on the other side, it’s still just a bet.
See what I mean. You’re leaving out the larger context.
Point, purpose, whatever. They are synonyms.
Look, you said you didn’t understand insurance. I tried to explain to you that the reason you don’t understand insurance is because you are wrong about your definition of insurance. If you fixed how you define “insurance” to make sense with how the rest of the world uses it, then you would have a much easier time understanding insurance.
But you refuse to change your definition of insurance. That to me signals that you’re not trying to learn, you just want to argue.
If that’s the case. Fine, let’s argue. But it is hard to argue about something if each of us have a different definition of what that something is.
Yes, you could see insurance as a bet. When giving insurance, you are betting that the insurer will be lucky. But since you have to make a profit, you have to obtain more than the expected value. It is not much different than a casino.
If you bet on a coin toss at a casino and win, you wouldn’t get 2x your offer, you might only get 1.9x. That 0.1x is the casino’s profit.
If your house has a 50% chance to lose all value in the next year, your insurance payment must be higher than 50% of your houses value. If it is 55%, then that 5% is the insurance companies’ profit margin.
If there is no data because nobody has ever been insured, then you just make an educated guess with a low confidence score.
So the last example has a high confidence that it’s a 50% chance results in 55%. Let’s say you eeucately guess that the chance is 20-80%. The middle point of your guess is still 50%, but due to the low confidence, your margin would need to be higher. In this case, they payment might be 70% instead of 55%.
Now you see why insurance companies need all that data. Higher confidence means lower prices without risk increase, or the same prices with a lower risk. Lower prices allow more market share, which results in more money.
If it were as you said, why would they even need to make predictions? Just adjust the rate according to the pool size. “Oh no, last month was really unlucky and the money pool shrank, we’ll increase prices this month”, “nice! Last month was lucky and the pool increased, we can lower the price”.
As I said, there are many ways to implement insurance.
Because an insurance is nothing more than a glorified bet. “I bet you that this year you won’t crash your car. If I lose I pay you X. But next bet will be more expensive for you if I lose”
For the insured individual its a bet. Not for the insurer.
By pooling a bunch of bets the insurer isn’t gambling any more. They know (more or less), how much they’ll have to pay out. Then can charge accordingly to know it’ll work out.
I don’t think an aggregate risk model makes sense for something like car insurance where personal behavior has such a huge impact on payouts.
Health insurance where insurance is a necessity and choices do not necessarily impact risk is where aggregate works better.
Healthe insurance (as done in the US) isn’t realy insurance, but that’s whole other issue.
Personal choice absolutely has a large effect on health risks. What foods you chose to eat? Where you chose live? How often you exercise? Those and hundreds more choices all effect health risk. Literally every choice you make has a positive or negative effect on your health risk. But most of them are ignored in health insurance prices.
Personal choice is a lot easier when you have money, leisure time, or both. Late-state capitalism means that many people don’t have those resources.
The aggregated risk is “if the person gets into a collision and how much it’s likely to cost” not “how much it will cost when the person gets into a collision”
What an asshole.
