On Wed, Jun 26, 2013 at 1:33 PM, Kyle Waters <u...@unum5.org> wrote: > On 06/26/2013 12:59 PM, Jessie A. Morris wrote: >> >> On Wednesday, June 26, 2013 12:50:13 Kyle Waters wrote: >> Since I am not an expert at everything I only purchase things from vendors >> whose insurance agencies are reputable. I verify that the merchant actually >> does have a policy through Super Insurance Utah and since he does I know >> that: 1. The insurance agency has checked out this guy's wares to make sure >> they live up to his claims. Since they'll be paying for my death (my family >> sues them and the insurance agency has to pay out) they have a good >> incentive to make sure he's legit. 2. I know that the insurance agency will >> pay out if I die. > > > > I think people have tried to explain this to me before your explanation is > by far the best I've seen. > > Elements of this to exist in our society and I think they can be a really > good way of handling things. The problem that happens in our society (and > maybe in a better educated society we could prevent it). Is that Super > Insurance Utah makes a bad call. Hundreds of claims are filed. Super > Insurance Utah closes down. Now all the companies are insured by Excellent > Insurance Utah. Of course I do my due diligence and find that Excellent > Insurance Utah is all the same people. Now I can either switch to a set of > store all insured by equally bad companies or I can become a sustenance > farmer. > > But of course there will always be stores with good insurance companies!! > Actually there won't be. It's called the market for lemons. Since > consumers only have to make a decision about one product(insurance) I guess > the argument would be that they could spend the time to do that right. I > just don't believe they will. Of course currently we manage all this by > selecting a product called a politician where research has shown our > decision making isn't much better.
I think the general concept here that is difficult for markets to manage correctly is that of externalities. I may be willing to risk a crap product if I get it cheap, but what if the crap product I buy and don't feel like insuring ends up harming *you* instead of me? This is only the tip of the externality iceberg. I know there are some libertarian/free market proposals for this sort of thing, but I don't find them very convincing. /* PLUG: http://plug.org, #utah on irc.freenode.net Unsubscribe: http://plug.org/mailman/options/plug Don't fear the penguin. */
