As regular readers know, I tend to be a purist when it comes to insurance. So I've railed on medical necessity as regards health insurance; the whole point is risk management.
And specifically the concept of Frequency vs Severity.
For example, it's unlikely that any one person will contract cancer (frequency), but those who do face some pretty steep bills (severity).
Or, closer to home, what are the odds that a 9 month old puppy will need expensive (and multiple) knee surgery? Again, not often, but a true pain-in-the-checkbook.
One more thing: insurance is (or ought to be) more about covering the unexpected, which is why your auto policy doesn't pay for oil changes or new wiper blades.
On the other hand,birth control convenience items are generally bought fairly often, but at a very nominal cost, so: frequency, but not severity, so not really appropriate to insure.
But insurance has a cousin: warranties. Typically, one purchases these to cover things like dishwashers and refrigerators and the like. But again, these aren't insurance (notice they never use the words "risk" or "premium"). Nothing wrong with that, and I'm not aware of any company offering these plans that claim to be.
Wish I could say the same for the insurance industry.
Our longtime guru of all things P&C, Bill M, asked me the other day if I'd heard about the newest trend in his side of the biz: equipment breakdown and service line coverage.
The equipment breakdown rider "covers the perils of mechanical, electrical and pressure systems breakdown," such as A/C units, TV's, even kitchen appliances. And service line coverage is for coverage "provides protection against a leak, break, tear, rupture, collapse or arcing of a covered service line," such as water and sewer lines, even from ordinary wear and tear.
How in the wide world of sports are any of these insurable risks? Well, obviously, now they all are, which offends my sensibility as an insurance purist.
But now I want to add both of those to my own policy.
Go figure.
Interested for yourself? As always, ask your agent (or seek out a local, independent one).
And specifically the concept of Frequency vs Severity.
For example, it's unlikely that any one person will contract cancer (frequency), but those who do face some pretty steep bills (severity).
Or, closer to home, what are the odds that a 9 month old puppy will need expensive (and multiple) knee surgery? Again, not often, but a true pain-in-the-checkbook.
One more thing: insurance is (or ought to be) more about covering the unexpected, which is why your auto policy doesn't pay for oil changes or new wiper blades.
On the other hand,
But insurance has a cousin: warranties. Typically, one purchases these to cover things like dishwashers and refrigerators and the like. But again, these aren't insurance (notice they never use the words "risk" or "premium"). Nothing wrong with that, and I'm not aware of any company offering these plans that claim to be.
Wish I could say the same for the insurance industry.
Our longtime guru of all things P&C, Bill M, asked me the other day if I'd heard about the newest trend in his side of the biz: equipment breakdown and service line coverage.
The equipment breakdown rider "covers the perils of mechanical, electrical and pressure systems breakdown," such as A/C units, TV's, even kitchen appliances. And service line coverage is for coverage "provides protection against a leak, break, tear, rupture, collapse or arcing of a covered service line," such as water and sewer lines, even from ordinary wear and tear.
How in the wide world of sports are any of these insurable risks? Well, obviously, now they all are, which offends my sensibility as an insurance purist.
But now I want to add both of those to my own policy.
Go figure.
Interested for yourself? As always, ask your agent (or seek out a local, independent one).
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