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Comment by logicallee | Hacker News Reader

So I have a huge interest in micro-economics.

Based on thinking about what you wrote, I have the following real question (not sarcasm or making a point): if your homeowner's insurance company gave you a $100/year break if you bought a certified "tiger rock" for $300 (that keeps tigers from breaking into your home) would you (actually) buy one? (You can substitute anything else that is obviously non-working, you can assume that corruption leads the policy - insurance actuary in cahoots with tiger rock supplier, whatever.) point is I'm curious if you would do it if absolutely non-working. (To the point where even sale of it is kind of offensive.)

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Perhaps you should also consider it from the insurance company's point of view - why are they offering discounts to specific people in the first place? Perhaps they know something that you don't?

If one insurer offered this, then no. If the majority of insurers I would be likely to use offered it, I probably would - after 3 years I've broken even, and I'll definitely be needing home insurance longer than that. This latter situation also maintains my ability to shop around for competitive premium rates.

So ultimately yes - I'd buy it as long as it has a positive EV for myself.

I'd ask them if I can install another one on the back door. If they're giving me free money, who am I to judge their motivation?

Ah but it isn't really free money. By installing two if these things, you've essentially hooked yourself to your insurance provider for six years. I'd happily give away two $300 bags of crap to get a customer handcuffed to me for six years.

Disclaimer: I hate car alarms with a vengeance. I think if a car alarm sounds and does not shut down within ten minutes (automatically or owner's intervention), there should be a large fine (I'd say the value of the car).

That's a very good point. I would argue that insurance is a long-term relationship, it's a very mature industry, I don't expect there will be great savings in changing providers, and finding the best provider means doing due diligence and reading through dozens of small print — not something I would relish anyway. They're offering a 33% annual ROI. If they can guarantee an option to re-up for at least four years, we're good.

You should adjust the car alarm's settings. If you don't, and you happen to live in my neighbourhood, I have a stack of bricks in my back yard, one of which will just about fit through that hole in your windshield.

great point - that I hadn't thought of!

For me these kinds of things are a straight economic calculation. If the tiger rock plus the premium is less than what other companies are charging, then I'll buy a tiger rock. Assuming it doesn't have some sort of problem.

If there's a problem with the tiger rock (it smells or takes up a lot of room or whatever) then I'll assign a value to the problem and add it to the premium for my calculations. Same thing with the "lock in" effect of having my rock only pay off after three years.

I suppose I could tell them I have a tiger rock when I really don't, but I place a value on integrity, too.

If I got that break, then yes, I would buy one. Hell, we don't even have tigers in this country, I'd still get it.

Yes. Isn't the car alarm already that?

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