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Comment by fiatmoney | Hacker News Reader

"Because of this, I avoid making any claims unless absolutely required."

This is economically efficient behavior - and in fact you should set your deductible to the highest amount you can afford out-of-pocket, as insurance is really only efficient for amounts above that. You should be aiming towards insuring catastrophic loss - eg, a fire that burns your whole house down.

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Yes, self insurance is always better if possible, since that means your cost is exactly equal to your risk. When you buy third party insurance, your cost is going to equal your risk + profit + overhead for the insurance company.

You self insure when you can afford the max cost you could incur (e.g. You could buy a new car if you had to.) You buy insurance when you can't afford the rare but very costly catastrophic loss - life insurance, health insurance, car injury insurance.

When renting a car, I don't usually take the insurance to reduce the excess from $5,000 to $0. However, I wonder whether rental companies are then keener to take note of a little scratch, especially when it was preexisting but gone unnoticed at initial inspection.

Not in my limited experience. I was surprised how little the guy seemed to check when I dropped the car off.

Depends on the area. Renting in midwest suburbs, they pointed out and wrote down every tiny scratch in a walkaround before I picked up the car. Renting in New Jersey, the car looked like it had been beaten with a baseball bat, they didn't mark anything down on the damage report.

AFAIK most credit cards (Costco AMEX) will insure your car rental and luggage during travel. Out here in California and probably at most popular airports, the only things they look for are large dents.

Insurance in my understanding is good for catastrophic events. If house burning down happen in 1 of 10000 homes in a lifetime, and all have taken insurance. For a small sum, you have ensured that you'll not be homeless, instead of each 10000 owners saving enough for a new house.

In case of large scale catastrophic events, insurance companies cover shit, though. It only works if you are the rare case and if you meet all the criteria marked in the fine prints that the insurance agent is careful never to explain.

Exactly this. I've worked with insurers and the first step to any claim is working out the cost of fighting the claim versus paying up. I wrote part of the system for managing estimates. You're only going to win easily if the claim value is cheaper than their lawyers fees.

So we can't really trust even in insurance for big things?

Fuck it. Who can we trust with anything nowadays?

Move out of the US.

I'm in the UK. It's no better here or in Europe.

Much better in Europe. Never had any issue with any of the claims to my insurance company, and price did not go up.

They even provide legal support for incidents outside home. I had a bike crash, and they took all the required paperwork and settled with the other part without me paying a dime.

I'm in Poland. But I guess given how everything is international now, I doubt EU has it any better than the US.

If you're below middle class, large corporations (banks, insurance companies, media providers etc.) are most likely able to treat You as they please. While it's really hard to blame the less wealthy, given our history. I think this is worldwide: If you're not able to protect yourself, no one will.

I wouldn't use it as a safety net myself these days, just a dice roll.

Good question. After working in insurance and finance for about 15 years, not those two sectors for sure.

You don't need to be fully self insured. I have my auto insurance deductible at $1k. So I'm self-insuring up to $1k of damage.

This is actually what we did: $5k deductible, filed for this once it was clear it would be well over $5k. But we missed a step: check the policy before you file to confirm that the policy actually does list coverage for the loss.

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