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Comment by dxbydt | Hacker News Reader

Such an insurance would probably be pretty much impossible. If you get a legit HTBRAI ( house trashed by random asshole insurance ), you've automatically created a market where these HTBRAIs are priced, bought and sold. That means you are essentially gaming burglary. eg. if I buy 100 HTBRAIs in some dicey neighborhood and there's an incident, my contracts automatically go up in value. That's a huge incentive for crime/arson/burglary.

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you're mistaking the insurance with risk swap contracts, options, CDS and the likes. The insurance is when you own the interest in the property subject to the risk you're insuring against and the limit of the insurance payment is generally the amount of the actual market value/damage/replacement cost to your interest in the property. Thus it is illegal to double(triple...) insure in order to receive double(triple...) insurance payment. I.e. owning a 100K house you can't get 10 insurances and receive 1M when your house is burnt. You also can't get an insurance for your neighbor's house.

What you can, if you find a dealer, is to buy a risk swap contract that will pay you the contracted amount in the case of some house burnt or some earthquake happens or some bonds go south. This isn't an insurance in the sense of regulated insurance business. In stocks it is called options, in mortgage bonds it is CDS.

"you're mistaking the insurance with risk swap contracts, options"

No I'm not. btw i trade options & risk swaps for a living, so I had a good laugh reading your mini tutorial on "this is called option, that is called CDS" :) Anyways, there's lots of holes in your explanation. For one, you say it is illegal to double-insure. Not true. It is illegal to double-dip, not double-insure. So you can get health insurance for yourself from your employer & simultaneously be covered by your spouse's employer - this is quite routine and legal, though frowned upon. What is illegal is to bill both the providers for your expenses. Another eg. you double-insure expensive realty, so if one insurance provider goes out of business, you don't have CP risk. But if there's damages to your house, you can recover losses from only one provider, not both.

As an aside, much of this is enforceable because insurance is such a heavily regulated industry, so you have centralized databases & its easy to check if you are double-insured, double-dipping & other edge cases. With HTBRAI, assuming such a thing ever comes into existence, you'd need a framework for all that regulation to fit in, which is what I'm skeptical about. airbnb is a fine service and they have a sound business model & a solid future - these insurance wrinkles will hopefully be ironed out in due course.

It's an interesting point, but I don't see why it would be any different from any of the usual insurances (car, house, etc). A market based on life insurance policies which then incentivizes assassinations is a chilling thought, and strikes me as analogous to your scenario, but I don't think such a thing happens, right?

You might be surprised - see this : http://www.bloomberg.com/news/2011-05-16/death-derivatives-e...

Other examples in the entertainment industry - say there exists insurance that your movie will earn a minimum revenue say 25 million usd. Your competitor simply buys those contracts and then trash talks your movie on the opening night ( by simply paying out bloggers and amateur journas some pittance sum of money ). Your movie tanks and so the contracts get exercised and your competitor makes a whole lot of money. So the next time around, you make a shitty movie to begin with. Then YOU buy the contracts, wait for your shitty movie to tank and cash in the contracts! This actually happens sometimes in Bollywood, though not in the exact fashion I described but in a more shady fashion.

Reminds of the plot of "The Producers". Sometimes real life can be stranger than fiction..

"Spring Time for Hitler" ... it's sure to be a "HIT"

When people are planning to murder their spouse, then sometimes pressure them to get a life insurance policy. It doesn't look good if the police notice this.

Don't such policies exist, though? Homeowners insurance and renters insurance typically have options to cover burglary. I would argue that the risk here is not people gaming things on the market side, but likely the traditional route of filing a false police report and making a fraudulent claim. Ideally there could be an extension on existing policies for people who are going to be offering their homes on services like airbnb.

Edit: I should have scanned the thread

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