Cat Insurance Situation Has Gone Beyond Ridiculous!
#41
Registered
Join Date: Nov 2006
Location: Huntington Beach, CA
Posts: 1,955
Likes: 0
Received 0 Likes
on
0 Posts
Out of curiosity, does say a 17 foot Eliminator Tunnel count as a Cat? And how do the insurance companies prove "experience" vs. "ownership"? I guess what I'm getting at is on paper does a 17 foot eliminator that runs at Havasu every weekend look any differnet that a 17 foot eliminator that went to the dump and just had it's registration renewed every year?
And what about a liability only policy? Any potential for reasonable prices there? Seems like it would be a good compromise between "self insurance" (aka no insurance) and buying your insurance guy a new car every year.
And what about a liability only policy? Any potential for reasonable prices there? Seems like it would be a good compromise between "self insurance" (aka no insurance) and buying your insurance guy a new car every year.
#42
Registered
Join Date: May 2006
Posts: 9
Likes: 0
Received 0 Likes
on
0 Posts
#43
Registered
Join Date: Jul 2006
Posts: 227
Likes: 0
Received 0 Likes
on
0 Posts
I'm no big fan of insurance companies, but from what I've been told the payout from one major catamaran accident (the kind where people die) can eat up everything and more an insurance company makes in catamaran premiums in a single year. It would be nice if the problem was as simple as insurance company greed or ignorance, but it's not. Litigation plays a huge role, settlements play a huge role.
But don't feel too sorry for insurance companies. They make plenty of money on the investments they make with your premiums.
The solution? In this society, where there are no accidents and there must always be someone to blame and, more important, to extract money from? There isn't one. There are no silver bullets.
You might fly F-18s and wax Michael Schumacher in F-1 on your weekends off from Top Gun, but you're still going to pay through the nose for cat insurance.
But don't feel too sorry for insurance companies. They make plenty of money on the investments they make with your premiums.
The solution? In this society, where there are no accidents and there must always be someone to blame and, more important, to extract money from? There isn't one. There are no silver bullets.
You might fly F-18s and wax Michael Schumacher in F-1 on your weekends off from Top Gun, but you're still going to pay through the nose for cat insurance.
#44
Registered
Where do you think the reserves come from to cover losses due to major catastrophes? If it all came from underwriting profit your premiums would be astronomically high. It is not uncommon for some lines of business to annually produce an underwriting loss so it has to be offset by investment income.
#45
Registered
Join Date: Jul 2006
Posts: 227
Likes: 0
Received 0 Likes
on
0 Posts
And don't get me wrong, Knot, I have no problem with that. I have no problem with insurance companies making the bulk of their profits from investments they make with the premiums they collect. But when they face losses, when they have to pay out, I don't feel sorry, per se, for them, either.
Insurance is a form of gambling. The insurance company is betting you won't have an accident and they won't have to pay out. You're hoping you won't have an accident, as they are, but being a realistic soul you realize that accidents happen and you need to cover your assets (pardon the pun).
Let's say Markel writes $10 million a year in high-perf boat insurance. One horrible wreck involving death in a high-end cat would easily eat that. Easily. Legal fees alone would be exorbitant. The company's entire gross profit from premiums would vanish ... in just one claim/case.
So yes, as you say, the insurance companies have to do some investing. In a way, investing is their primary business. They just raise investment capital through premiums.
As I understand it, the whole insurance concept came out of China, where junkt owners on the Yangtzhe River created a pool of money for anyone who lost on junkt on the river. That way, no shipper's business would be destroyed by a single accident. In a way, it was a weird and ultimately successful blend of capitalism and communism.
Insurance is a form of gambling. The insurance company is betting you won't have an accident and they won't have to pay out. You're hoping you won't have an accident, as they are, but being a realistic soul you realize that accidents happen and you need to cover your assets (pardon the pun).
Let's say Markel writes $10 million a year in high-perf boat insurance. One horrible wreck involving death in a high-end cat would easily eat that. Easily. Legal fees alone would be exorbitant. The company's entire gross profit from premiums would vanish ... in just one claim/case.
So yes, as you say, the insurance companies have to do some investing. In a way, investing is their primary business. They just raise investment capital through premiums.
As I understand it, the whole insurance concept came out of China, where junkt owners on the Yangtzhe River created a pool of money for anyone who lost on junkt on the river. That way, no shipper's business would be destroyed by a single accident. In a way, it was a weird and ultimately successful blend of capitalism and communism.
#46
Registered
Thread Starter
Let's say Markel writes $10 million a year in high-perf boat insurance. One horrible wreck involving death in a high-end cat would easily eat that. Easily. Legal fees alone would be exorbitant. The company's entire gross profit from premiums would vanish ... in just one claim/case.
Also don't let you insurance company see your screen name.
Michael
Thread
Thread Starter
Forum
Replies
Last Post
Chris288
Trucks, Trailers and Transportation
68
11-18-2005 09:03 AM