Right…you don’t insure your vehicle for a certain amount. But what if you did…can you not insure items for dollar amounts? Your Ming dynasty vase…Dirk Diggler’s…you know what I mean. You made it sound like an insurance company agreed to the $10MM payout on an item, then could refuse to pay. I know that’s not how it typically works, but it can be done that way, no? And if so, it’s on the company to do the due diligence up front before underwriting a policy, correct?
For a more real life example…how does a jewelry rider on my home owners policy work?
Right. This is where you use an “agreed value” policy as described above. If you have any jewelry insured, for example, it will be on an agreed valuation basis. You provide a jeweler’s valuation to justify the amount, and that number gets enshrined in the policy, and that’s what they pay you if it’s lost or stolen.
You are also correct that, in such cases, it’s on the insurance company to do its due diligence up front. But you have to make sure there aren’t any weasel words in the arse-end of the policy that allows them to change their mind after the fact. Such policies are often “non-admitted / surplus lines”, which means the language of the policy isn’t regulated like it is for auto and homeowners, so they can caveat the shit out of it to their heart’s content leaving you SOL in the event of a claim.
ETA: A jewelry rider to your homeowners is likely regulated as it’s within the shell of a regulated policy. It’s still worth reading it though, to see if they have any way to nickel, dime or dollar you out of claim monies.
ETA+: “Regulated” doesn’t mean that everything in a policy is great for you; it’s regulated by the state of Texas after all. It just means that everything in the policy has to be approved by the state, usually following a Bunga-Bunga party with insurance company lobbyists.
Understood…but my question is how is the principle of “proof of interest” different for life insurance than for say car or home insurance? Why do you have to prove anything more than “my house burned down, and it was insured for $X?”
A thing like a house or car has an intrinsic value. Even that 1961 Stingray is replaceable. Your house isn’t insured for what you paid for it - that included the land value and transactional expenses like realtor fees that would not recur. It’s insured for how much it would cost to rebuild the same house on that lot in the event it burned down to the slab. The contents - all your worldly shit contained therein - are insured for 60% of that number. It’s a real world, math-driven process.
Conversely, with life insurance, how much are you worth? How much are you worth to me, say, versus how much are you worth to Mrs Hawk? The valuation will differ depending on who is being asked the question.
And then you have to factor in what you want to achieve with the payout from the policy. Do you want to pay for a kick-ass funeral on the infield at Minute Maid? Which players do you want as pall bearers? Or that plus pay off your mortgage? Or all that plus your kids’ college education? If so, where? Harvard or SFA? Or all that plus making sure Mrs Hawk doesn’t have to work again?
The amount of life insurance you buy is such a subjective thing that it cannot be “proved” by receipts and valuations. So they let you pick the number, and it’s on them to ask enough questions about your circumstances that they are comfortable with the number you pick.
I rarely place a sports bet, but I used to play craps in Vegas. It mattered a great deal where you played because the house rules, and therefore the vigorish (vig), can differ greatly among the casinos. Downtown casinos were almost always better for the bettor, if a lot less fancy. Binion’s was the best for a long time with a $1 line and 5 to 1 odds. The Plaza had a decent game too, but the quality of the dealers was much better at the 'Shoe. In fact, craps dealers at Binion’s were the best in Vegas, by a wide margin. Sometimes Binion’s would go to 10-1 odds and for a short time they actually went 100-1 odds on a $1 line bet! That’s a microscopic vig. You could hardly get to a table.
In a gambling casino, the house holds an inherent advantage or “vig” on any and all games. Sometimes it is straightforward, like the sports book, sometimes it’s buried in the game itself. That doesn’t mean you can’t win or win big. It’s possible to make a $5 bet on a hard 8 and let it ride for four consecutive rolls and walk away with $50,000 if the dice roll double 4 all four times. That doesn’t mean the House doesn’t have a vig on the hard 8, it just means you were very lucky. Over a long enough period of time, the house will always win.
The same way it doesn’t mean the “House”, or life insurance company, doesn’t have a “vig” in the larger game just because you die the day after your policy goes into effect. It just means you got-----err—lucky.
That’s true. The vig in that play is all on the line bet which pays 1 to 1 regardless. That’s why you want a game with small minimums and large odds. The strip only gets 2-1 odds, so I head to the seedier hotels downtown. El Cortez has a good game if you can stand the place.
The best bets in craps are the boring ones. A line bet and two comes, with as much odds as allowed. Stay away from the stuff in the middle of the table and stay away from the ultimate sucker bet, the Field.
This is one of the things I’m curious about. I know that my house is insured for basically “replacement value”, but that changes. And what if I don’t want to rebuild my house? Can an insurer say “yeah, we insured you for $500,000, but my brother in law knows a guy who’ll rebuild it for $100,000, so that’s all we’re gonna pay.” Or similarly “oh, you don’t want to rebuild? Skipping off to Mexico? In that case, we’re not gonna pay you the $500,000”…or “it cost $500,000 to rebuild when we insured it, but the housing bubble burst, and it’s now a lot cheaper…” I guess it’s kind of like jewelry in a sense “I insured my gold watch for $10,000, but the price of gold now has fallen and it’s only worth $5,000”…do I still get the $10,000 if it’s stolen in a burglary? I know that if my policy says "$500,000 but it actually costs $750,000, they won’t cover the difference. My insurance company sends me a letter every year that I personally bear the risk if I’m underinsured. But what if I’m overinsured? Can they weasel out of it?
This is where I don’t trust Jake from State Farm. Or Pedro Cerrano from Allstate.
I only play roulette. It’s the only game where I don’t have to think and there is absolutely no strategy whatsoever. I suppose there’s not much strategy to a slot machine, but you look kind of ridiculous at the slots in a white dinner jacket.