When I was in college, one day I got bored as I read the fine print of an insurance policy of the dormitory and I discovered a phrase: "act of God". This is an acutal insurance term. The insurance policy I was reading did not cover major devastation from Mother Nature and acts of God. Fine prints get insurance companies out of trouble. They like to collect premium dollars for premiums, and have lawyers to avoid payouts as much as they can.
Now what does my insurance cover? Isn't anything an act of God? Can their lawyers play with terminology that I will never get any coverage?
Each year, the United States is battered with hurricanes and devastating storm. I don't know what kind of coverage the victims get. But it is scary that people may simply lost everything in a few minutes of severe storm...
Insurace companies flee and refuse to cover flood zones. Heck, my insurance company threaten to not cover me if I have any damage in my house within the first year.
But insurance is a must. We need mandatory insurance, in driving and in home ownership. It just gives the insured a pyschological sense of security and invisible money drain from your wallet as years go by accident free.
Insurance is mathematicians*-turned-greedy-business. Let's see you are a teenager? You have x% dying in accident, yikes i won't cover you. I don't care if you are a noble teenager who won't drink and drive. You are non-smoker 30 year old? Ok, you are not as likely to die, we will cover you. Oh you are smoker? let's raise your premium. oh you turn old? well we won't cover you. You are on your own. Oh, x% will die in traffic accident, and y% of that will donate organ. Ok we will put the organ donar card on the back, oh it will save z lives a year.
However if insurance is not creepy like this, how does it get money to cover you when something really happened?
*Actually, statisticians. Mathematicians and statisticans usually live in different floors in their own departments.
2 comments:
The entire insurance industry is calculated and slimy. But they are great employers. Fear generates a steady stream of money and employment.
Insurance is all about nameless people and their data. Data means business! database vendors, mailing vendors, the post office.
I detest my insurance and security system bills; Insurance agents are not good neighbors.
how do they define the probability of "acts of God", is it just anything that doesn't fit a probability model?
Proverbs 16:33 "The lot is cast into the lap, but its every decision is from the Lord"
now from literal interpretation of the verse, insurer is really saying that if it doesn't have a formula or model for something to happen, it's "acts of God".
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