Comment by nvahalik | Hacker News Reader

Comment by nvahalik | Hacker News Reader

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> Nearly every customer should be able to use an entirely automated online form for signing up and for making insurance claims. Claims should be settled entirely with the customer uploading a 1 minute video showing what damage occurred, plus the bill to fix it.

Ah yes, the perfect recipe for fraud!

> Assume 1 claim per customer per decade

Herein lies the problem in some parts of Florida/California. If Florida gets hurricanes every year, then you're talking about a lot of payouts. This is a big part of the reason they are pulling out.

> and each claim takes an average of 10 minutes to handle

Normal claims take several hours apiece, depending on the type of claim and loss. Claims are documented. That way people can't get a new roof every 3 years and never replace it. Also, people don't actually know what their policies cover. Adjusters have to know the policies they adjust so that they can approve/deny coverage based on what the policies actually state.

> check video, spot check bills, make payment

They'd go out of business pretty quickly. People like to crap on insurance companies but there are a lot of people out there who are grade-A A-holes who feel like they should be compensated. It's amazing what some companies will pay for but it's also amazing how entitled people feel like they are.

> Ah yes, the perfect recipe for fraud!

There are a few things you can do to dramatically reduce the fraud risk.

Take the video of the damage immediately and through your own app. Now you can confirm with decent certainty the where/when of the incident and stop double-claims. You can also refuse to pay for any damage unseen in the video. No more "I hurt my back" type claims weeks later - unless you said your back hurt at the time, it isn't going to be covered.

Next, you require the user upload all the receipts they are claiming before you'll pay them a cent. This means that users will typically repair stuff 'on the cheap', rather than using very expensive repair/rebuild services that they'd use if they knew for sure insurance would be paying.

Third, you either pay avery claim in full, or not at all. If you find any evidence of fraud, you don't do a partial payout.

Ah yes, make the insured pay out of pocket first. Brilliant. Too poor to buy a new car to replace the one that just got legitimately totaled? Gotcha!

> No more "I hurt my back" type claims weeks later - unless you said your back hurt at the time, it isn't going to be covered.

This would likely lead to an overwhelming wave of lawsuits. Soft tissue injuries can often have a delayed onset.

Please don't take this the wrong way, but your advice comes across as that of someone who may not have experienced either side of an insurance claim.

>Take the video of the damage immediately and through your own app. Now you can confirm with decent certainty the where/when of the incident and stop double-claims. You can also refuse to pay for any damage unseen in the video. No more "I hurt my back" type claims weeks later - unless you said your back hurt at the time, it isn't going to be covered.

This noticeably doesn't stop you from purposefully damaging your home for an insurance payout. If I take a video of the damage to my roof right after I knock a tree over onto it, I would get a new roof paid for by an insurance company.

>Next, you require the user upload all the receipts they are claiming before you'll pay them a cent. This means that users will typically repair stuff 'on the cheap', rather than using very expensive repair/rebuild services that they'd use if they knew for sure insurance would be paying.

Seems like a recipe for builders to overcharge the insurance company. Unless you're suggesting that homeowners physically pay for the repairs before submitting the claim, which (for obvious reasons) is prohibitively unaffordable in most cases where you'd want to use insurance.

>Third, you either pay avery claim in full, or not at all. If you find any evidence of fraud, you don't do a partial payout.

You better have a great legal team, because you'll be getting sued a lot. In addition, you'll have very limited evidence to prove fraud (as you didn't have anyone visit the site of the damage, didn't have anyone negotiating the price with the construction company, etc.)

Combine it all together and you'll be paying out a lot of fraudulent claims. You'll also be losing a lot of lawsuits where you don't have enough evidence of fraud.

> Take the video of the damage immediately and through your own app. ... You can also refuse to pay for any damage unseen in the video.

A good adjuster—especially an independent adjuster—is actually incentivized to find and pay for related damage. Not only does this (marginally) increase their billable, but it also leads to happier insureds and reduces the possibility of a subsequent claim (since those take time and money to handle—plus your deductible is per loss not like medical insurance where it's per year).

> This means that users will typically repair stuff 'on the cheap', rather than using very expensive repair/rebuild services that they'd use if they knew for sure insurance would be paying.

Except that, depending on the policy and the roof type, you may or may not be able to do that. We've seen entire roofs have to replaced due to aging or lack of the same material. Granted, it's not all policies, but it does happen. You can't get the same material due to age of it. Or the manufacturer went out of business. Or you find someone who does the work right and they find MORE damage than the adjuster originally found which requires a supplement.

People like to crap on insurance companies but I've seen them pay for absolutely STUPID stuff that they likely had no reason to pay for... but they did.

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