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Comment by jacquesm | Hacker News Reader

> If it really only happens 0.02% of the time

That may be the problem right there. It most likely happens far more frequently so they can't insure and they can't self-insure. So the loss of good-will is small in comparison to the loss of funds. A broken model with sufficient marketing money behind it is indistinguishable from a working company right up until the moment the whole thing comes crashing down.

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I just did the math on this and 0.02% of $4,000 is around $1, while KitSplit apparently charges 20% fees, or $20 on a $100 rental. It sure seems like they could afford to self-insure.

Or are you saying that they're lying about the 0.02%?

0.02% of rentals is also not 0.02% of gear value rented. I'd assume "voluntary parting" would occur on the higher value rentals.

> Or are you saying that they're lying about the 0.02%?

Yep. Because otherwise they would pay out.

Likely. And even if they weren’t lying, admitting full liability would be an incentive to fraud (arrange for your kit to be “stolen” by a co-conspirator, then collect the reimbursement) so you would probably see that percentage soar.

If you wanted to commit insurance fraud, you wouldn't get a third party involved (with some vetting process and photos), too much effort, leaves too much of a paper trail, etc.

You'd just smash a window or kick in a door then file a police report then an insurance claim.

Remember that they are filing police reports against your co-conspirator and sending collections agencies to get the money back.

Most rentals are probably less than $4,000 and the high value rentals are the ones most likely to get stolen.

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