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Comment by VectorLock | Hacker News Reader

Not to defend the insurance companies, but I think it is bad faith because the intention of the insurance is to protect the insured from risk from an unforeseen situation, not to attempt to gamble or arbitrage against the insurance company.

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I've come to the conclusion that the "protection" most insurance companies offer, are scams. Hear me out. While there are one-off insurances, most insurance is monthly or annually. So each year you pay a set amount. Now, consider saving that money instead. Usually, if you can go only a few years without an accident, you would have saved up more than enough to cover that incident yourself with your insurance savings. On top of that, you'd most likely save yourself the hassle of going to court if the insurance company for some reason or another contests your claim, and let's face it, they often do. So not only is the saving a great alternative, but it also insures a payout. The only instance where insurance might be good, is if the amount covered is far larger than you could ever hope to afford yoruself. In this case it might be smart to sign up to an insurance, if there is a high enough risk that you might need it. Even then, simply saving the insurance fee might be a better option, becuause you then have the option to draw interest on it (if it's high enough), or even invest it.

protecting against the zero-bound is the value - that's not a scam. As the ratio of potential loss to net worth drops, that's less interesting and so is the insurance.

Varying levels of deductible choices hard code this notion even further into the system. If you're farther from zero-bound worries you can essentially buy less insurance with a high deductible.

I agree with you. Its not in the insurance companies best interests to pay out when they can, they have no incentive to "help" you. Sometimes I wonder if home insurance is even worth it. Barring the house burning down from a lightning strike they'll try to clause their way out of almost every situation and even if they can't paying the deductible and insurance increases aren't even worth it except in the most extreme cases.

I pretty much pay them just so I don't have to experience the social ramifications of telling people I didn't have home insurance if something did happen.

Have you ever calculated how much you've paid in insurance fees over the years, and the interest you'd earn if you simply saved the money?

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