Thread

1. sib · 1790706977 · focus · HN ↗

   "Did you know that home insurers use aerial drones to study your rooftop? If the conditions signal neglect, they might cancel your coverage before an accident."

   While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.

   This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets, which implies increased future risk of loss.

   In fact, I received a letter from my homeowners insurance company a couple years ago stating that they would not renew our coverage due to conditions that they'd observed (clearly from aerial imagery) including overgrown bushes touching the walls of the house and some larger tree branches growing over the house.

   I had a landscaping company come and fix the issues, sent my own drone up to take new pictures, sent the company the pictures, and they agreed to continue coverage. And now my house has less future risk of damage. This seems like a win-win for both of us.

   1. gpderetta · 1790708902 · focus · HN ↗

      > This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets

      This is more like your insurer following you around and evaluating your driving skills.

      And yes black boxes are a thing but a) are opt-in and b) universally reviled.

      1. gbacon · 1790712915 · focus · HN ↗

         Prices carry information and are not arbitrary. Insurance is a paid transfer of risk. Policies that have greater risk of loss require higher premium charges or the insurer goes broke.

         Actuarial science is its own field that prices uncertain future events. As you’re bringing out here, the insurer has additional uncertainty as to the actual driving habits of their policyholders, so some conservatism is likely priced in. Aggressive drivers would like to pay the premiums of careful drivers.

         This is related to the origin of GEICO, Government Employees Insurance Company. Back in the day, you had to be a state or federal employee for them to bind coverage. The investment thesis was that civil servants’ caution in their choice of employment was an accurate indication of their overall risk appetite and risk-taking behavior. GEICO was able price policies lower without going broke because they by design insured a lower-risk population.

Unofficial Hacker News client; not affiliated with Y Combinator.