I think anyone can claim it a scam solely owing to the substantial profit margins some of these insurance companies have. Maybe I'm just stretching the definition, but I'd say any business where people are making way more money than they should be able to is a scam.

Well once you've informed the governments of the world how much profit a company can make without falling foul of the "way more than they should", no doubt they'll enforce this. Make sure to end your letters "ps: I am not a crackpot" so they pay attention.

[quote name='SeraphLance' timestamp='1301864371' post='4793946']
I think anyone can claim it a scam solely owing to the substantial profit margins some of these insurance companies have. Maybe I'm just stretching the definition, but I'd say any business where people are making way more money than they should be able to is a scam.

Well once you've informed the governments of the world how much profit a company can make without falling foul of the "way more than they should", no doubt they'll enforce this. Make sure to end your letters "ps: I am not a crackpot" so they pay attention.
[/quote]

"Heads I win, tails you lose" is a scam. Do you really expect any government to stop such a thing?

I don't trust insurance. I bought a phone like 5 weeks ago and at the end figuring out the exact pricing from Sprint for my new phone and the plan he was like "do you want the insurance plan also?" and I was like "how much a month" and he was like "5 dollars" and I was like "So if it gets stolen you'd pay for 100% of the phone's price basically giving me a new one?" and the guy paused "well there's a 100 dollar deductible". Tricky people. I always imagine people selling insurance have so many loop holes and fine print that I don't have the time to read it all and will end up getting screwed somehow so I don't get it.

Then again I don't like gambling so it's a very odd topic for me. Then again things like auto insurance are mandatory so it's impossible not to get it. I don't drive much at all so that I lower my chance of getting hit by another car. I say that because no one thinks they're going to hit another car.

I honestly wouldn't be against a non-profit government based monopoly insurance system for everything. Pooling that much money together would probably make things really cheap and keep the greedy capitalist ideas out of the system.

This conversation reminds me of the fire department subscription models where in some areas forgetting to pay for it means your house will burn to the ground. It's an interesting gamble people play. </ramble>

I don't trust insurance. I bought a phone like 5 weeks ago and at the end figuring out the exact pricing from Sprint for my new phone and the plan he was like "do you want the insurance plan also?" and I was like "how much a month" and he was like "5 dollars" and I was like "So if it gets stolen you'd pay for 100% of the phone's price basically giving me a new one?" and the guy paused "well there's a 100 dollar deductible". Tricky people. I always imagine people selling insurance have so many loop holes and fine print that I don't have the time to read it all and will end up getting screwed somehow so I don't get it.

That seems like a scam till you spill a drink on your $500 phone. Unless you want to buy a replacement off ebay, which is still more than $100 for a decent phone.

That seems like a scam till you spill a drink on your $500 phone. Unless you want to buy a replacement off ebay, which is still more than $100 for a decent phone.

It's just an anecdote emphasising the dishonesty inherent in these kinds of complex contracts. If you're not experienced enough to ask about deductibles, etc, then you'll end up disappointed when an accident happens.

Last time I moved cities, the shipping company recommended me a few different insurance companies in case their truck explodes, falls in the ocean, etc... I didn't read the fine print and just took the word of the sales rep that the contract covered any losses up to $10,000. There was some minor damage in the move ~$200, so I rang up to make a claim and found out that though I can make claims of up to $10k, I have to cover the first $500 of damage myself
Obviously my fault for not reading the contract carefully enough -- but at the same time it's awfully dishonest of them to give a certain impression while not disclosing negative details of the deal.

It also seems unintuitive that the smaller the claim is, the smaller the pay-out percentage is.
e.g. in my case:
$500 claim - 0% paid
$1000 claim - 50% paid
$10,000 claim - 95% paid
If I'd looked at a table of pay-outs like that, I probably would've chosen a different insurance contract -- one that would actually cover the minor damages I was expecting to occur in long distance shipping (as well as the unexpected catastrophic accidents).
Saying you can make "claims up to 10k" isn't quite the same as saying that claims have "almost 100% coverage at 10k damages, 50% coverage for 1k damages, and no coverage for $500 damages".

[quote name='way2lazy2care' timestamp='1301880642' post='4794018']
That seems like a scam till you spill a drink on your $500 phone. Unless you want to buy a replacement off ebay, which is still more than $100 for a decent phone.

It's just an anecdote emphasising the dishonesty inherent in these kinds of complex contracts. If you're not experienced enough to ask about deductibles, etc, then you'll end up disappointed when an accident happens.

Last time I moved cities, the shipping company recommended me a few different insurance companies in case their truck explodes, falls in the ocean, etc... I didn't read the fine print and just took the word of the sales rep that the contract covered any losses up to $10,000. There was some minor damage in the move ~$200, so I rang up to make a claim and found out that though I can make claims of up to $10k, I have to cover the first $500 of damage myself
Obviously my fault for not reading the contract carefully enough -- but at the same time it's awfully dishonest of them to give a certain impression while not disclosing negative details of the deal.

It also seems unintuitive that the smaller the claim is, the smaller the pay-out percentage is.
e.g. in my case:
$500 claim - 0% paid
$1000 claim - 50% paid
$10,000 claim - 95% paid
If I'd looked at a table of pay-outs like that, I probably would've chosen a different insurance contract -- one that would actually cover the minor damages I was expecting to occur in long distance shipping (as well as the unexpected catastrophic accidents).
Saying you can make "claims up to 10k" isn't quite the same as saying that claims have "almost 100% coverage at 10k damages, 50% coverage for 1k damages, and no coverage for $500 damages".
[/quote]

Very true. Some brokers are dishonest scam artists, but the system of insurance itself is not a scam. I would argue that some exceptionally small scale insurances aren't worth the cost, as you don't have much at risk.

The only time I've had to deal with an insurance broker it was very nice. She walked me through everything, highlighted all the unexpected costs I might not notice, and then game me a pad to make notes on before she left me alone for a bit to read the whole thing in detail. She wanted me to make notes on any parts that didn't seem clear.

This conversation reminds me of the fire department subscription models where in some areas forgetting to pay for it means your house will burn to the ground. It's an interesting gamble people play. </ramble>

Yeah, I remind me of an article where a house is on fire, the firemen went there, and watch it burn down while making sure the fire didn't spread to neighboring house. This is because the other house paid for the fire department subscription, that house didn't.

There was a lot debate going on, but occam razor rules still apply. some people does say put out fire first, the owner might learn their lesson and pay all back bills (cheaper than new house, obviously). but this will lead to nobody pays - until their house burn down. so in the end, the fire dept say it work like insurance. if someone didn't pay for it, got into accident, an insurance company won't pay him and expect him to pay the subscription later.

it is sad, but it is life. but this is where I agree with Ramit Sethi. certain things NEED to be done automatically, forced if needed. like that fire dept. it need to be owned by the goverment, and the money taken out of your pocket by force.

agreed, FableFox. I think there are certain things which should be considered services for the public good -- like health insurance -- which should be provided for everyone by default, with pay-in determined based on ability to pay. Other things which are still generally for the public good but somewhat less critical (car/home insurance, for example) should be allowed to operate as independent businesses, but regulated such that the cost is not unreasonable (yes, this will hurt their bottom line somewhat, but I think sometimes corporate interest should take a backseat to public interest.

agreed, FableFox. I think there are certain things which should be considered services for the public good -- like health insurance -- which should be provided for everyone by default, with pay-in determined based on ability to pay. Other things which are still generally for the public good but somewhat less critical (car/home insurance, for example) should be allowed to operate as independent businesses, but regulated such that the cost is not unreasonable (yes, this will hurt their bottom line somewhat, but I think sometimes corporate interest should take a backseat to public interest.

yeah, the problem with life is that it only sound good on paper. the rich (the one that pay taxes), spend money on multivitamins, health club, gym club, personal trainer, training equipment, etc, and they read the news of the goverment spending a lot of money on joe blow that didn't workout, didn't work, and eat fat non stop. and this piss them to no end.

in Malaysia, the government tax cigarettes highly. this to compensate for all the health money spent on smoke related health problem.