robertv@tekla.UUCP (Robert Vetter) (04/05/86)
In article <5981@allegra.UUCP> dsf@allegra.UUCP (David Fox) writes: >I've been hearing some bad stuff about the insurance industry recently. >For example, 60% of all daycare centers had their rates go up 300 - 400%, >despite the fact that 90% never collect on their policies and the >largest claim last year was $15,000. The industry claims that rates >are going up due to the proliferation of lawsuits and large awards, but >others claim that even if you add all the awards together you get an >amount which is insignificant to the industry. I realize that these are >vague allegations and statistics, but I keep hearing about this. Does >anyone have any facts and/or opinions about this? -david As long as: 1) Carrying of certain types of insurance is required by law. 2) Regulation of rates is almost non-existant. 3) Insurance companies can raise rates from a few well publicized events (beyond actual requirements). we will be required to to pay through the nose. I understand that current rate hikes across the board are based on who can pay and the fact that poor investments were made by the insurance companies in a depressed economy. I wish I could bill my employer when my investments bomb. Rob Vetter (503) 629-1291 [ihnp4, ucbvax, decvax, uw-beaver]!tektronix!tekla!robertv "Waste is a terrible thing to mind" - NRC (Well, they COULD have said it)
dee@cca.UUCP (Donald Eastlake) (04/21/86)
In article <> robertv@tekla.UUCP (Robert Vetter) writes: >In article <5981@allegra.UUCP> dsf@allegra.UUCP (David Fox) writes: >>I've been hearing some bad stuff about the insurance industry recently. >>For example, 60% of all daycare centers had their rates go up 300 - 400%, >>despite the fact that 90% never collect on their policies and the >>largest claim last year was $15,000. The industry claims that rates >>are going up due to the proliferation of lawsuits and large awards, but >>others claim that even if you add all the awards together you get an >>amount which is insignificant to the industry. > > > As long as: > 1) Carrying of certain types of insurance is required > by law. > 2) Regulation of rates is almost non-existant. In Massachusetts, rates for legally required insurance seem to be reasonably regulated. > 3) Insurance companies can raise rates from a > few well publicized events (beyond actual > requirements). > we will be required to to pay through the nose. > Sorry, you would need to meet another condition, some strong entry barrier into the insurance industry. True, you do have to have enough assets to become an insurance company, but then what good is one that will go bankrupt the first time there is a big claim? Day care centers can get together and form an insurance cooperative, get insurance overseas if all US insurance companies are pricing above the market (or sue for triple damages if this is due to a conspriacy), etc. > > I understand that current rate hikes across the board are > based on who can pay and the fact that poor investments > were made by the insurance companies in a depressed economy. > Insurance companies tend to invest conservatively in such things as real estate or high quality bonds. It is reasonable that market conditions could negatively effect many such investments at the same time. As a result many insurance companies would increase rates a bit. Overall, I think a relatively free market in insurance, tempered by government anti-trust and limited intervention in certain areas is better than the nationalization of insurance or total government regulation of rates or the like. -- +1 617-492-8860 Donald E. Eastlake, III ARPA: dee@CCA-UNIX usenet: {decvax,linus}!cca!dee
herbie@polaris.UUCP (Herb Chong) (04/29/86)
the insurance industry in the US appears to be a positive feedback
system. i think that this is because lawyers are allowed to charge as
part of their fee a percentage of the award in liability case. if the
lawyer is being paid out of the award then obviously the maximum award
possible will be asked for in the hopes of getting the largest possible
gains. juries look and see that xxx received nM$ for grief and
personal anguish and decide that party yyy suffered at least that much
so they should get at least nM$ too and perhaps a bit more for punitive
damages. guess who really pays those damages. couple that with what
must be the most lawsuit-happy country in the whole world and rates
spiral because aw Cds spiral because lawyers make more when the aw rds
go up.
in Canada, i believe it is illegal for lawyers to charge anything
other than a flat fee. aw Cds for damages and such are much lower
and insurance costs are not quite so outrageous.
Herb Chong...
I'm still user-friendly -- I don't byte, I nybble....
VNET,BITNET,NETNORTH,EARN: HERBIE AT YKTVMH
UUCP: {allegra|cbosgd|cmcl2|decvax|ihnp4|seismo}!philabs!polaris!herbie
CSNET: herbie.yktvmh@ibm-sj.csnet
ARPA: herbie@ibm-sj.arpa, herbie%yktvmh.bitnet@wiscvm.wisc.edu
========================================================================
DISCLAIMER: what you just read was produced by pouring lukewarm
tea for 42 seconds onto 9 people chained to 6 Ouiji boards.herbie@polaris (04/29/86)
the insurance industry in the US appears to be a positive feedback
system. i think that this is because lawyers are allowed to charge as
part of their fee a percentage of the award in liability case. if the
lawyer is being paid out of the award then obviously the maximum award
possible will be asked for in the hopes of getting the largest possible
gains. juries look and see that xxx received nM$ for grief and
personal anguish and decide that party yyy suffered at least that much
so they should get at least nM$ too and perhaps a bit more for punitive
damages. guess who really pays those damages. couple that with what
must be the most lawsuit-happy country in the whole world and rates
spiral because awards spiral because lawyers make more when the awards
go up.
in Canada, i believe it is illegal for lawyers to charge anything
other than a flat fee. awards for damages and such are much lower
and insurance costs are not quite so outrageous.
Herb Chong...
I'm still user-friendly -- I don't byte, I nybble....
VNET,BITNET,NETNORTH,EARN: HERBIE AT YKTVMH
UUCP: {allegra|cbosgd|cmcl2|decvax|ihnp4|seismo}!philabs!polaris!herbie
CSNET: herbie.yktvmh@ibm-sj.csnet
ARPA: herbie@ibm-sj.arpa, herbie%yktvmh.bitnet@wiscvm.wisc.edu
========================================================================
DISCLAIMER: what you just read was produced by pouring lukewarm
tea for 42 seconds onto 9 people chained to 6 Ouiji boards.dricej@drilex.UUCP (Craig Jackson) (05/03/86)
In article <484@tekla.UUCP>, robertv@tekla.UUCP (Robert Vetter) writes: > > As long as: > 1) Carrying of certain types of insurance is required > by law. > 2) Regulation of rates is almost non-existant. > 3) Insurance companies can raise rates from a > few well publicized events (beyond actual > requirements). > we will be required to to pay through the nose. > > Rob Vetter > (503) 629-1291 > [ihnp4, ucbvax, decvax, uw-beaver]!tektronix!tekla!robertv Sounds like a great deal. How do I get in on it? Seriously, when you look at things like this, you should also look at what are the barriers-to-entry in the given field. One of the reasons why the insurance problem is so frustrating is that they have an apparent monopoly. By and large, we've given them that monopoly. I suspect that it's a real pain to start a new insurance company, even one that had sweetness, light, and special favors for low-income people as its intent. Here in Massachusetts insurance is so regulated that no self-respecting businessman would put up with it; we still have a malpractice insurance crisis. (Yes, I meant to say that I can't understand why anybody would write insurance in Massachusetts.) -- Craig Jackson UUCP: {harvard,linus}!axiom!drilex!dricej BIX: cjackson