Comment on Hello Photographers and Videographers!
jmp242@sopuli.xyz 1 year agoI think you need to define “bad deal” a little more. Insurance is money you’re basically throwing away if you never need to make a claim - and in a lot of cases you do hope you never need to make a claim. But that doesn’t necessarily make it a “bad deal”. If the items you’re risking are enough that you replacing them would be more likely to kill your hobby - insurance isn’t a bad deal, it enables you to have this hobby. Because if you leave your camera at home because you’re afraid of losing it or breaking it - well, you’re not actually getting much use out of it (in most cases).
The other thing is you can perhaps have more information about your situation and be pretty sure you’ll need to replace or repair something in a way that doesn’t necessarily widely apply or see insurance companies offering extremely low rates for some situations - perhaps something like loss leaders. An example might be some of the house insurance policies that have a rider for mechanical breakdowns, where the rider is a very low fee ($45 a year say). If you know it covers well pumps, and that you’ll need to replace your well pump in ~10 years, the cost isn’t going to exceed the cost of the well pump installation minus the deductible. I assume this sort of policy works because the company also sells a lot of these policies to people who don’t have wells.
The other nitpick I’ll have here is that unless you define “bad deal” as “not the cheapest option overall”, you’ll have way more reasons to discard this idea. For instance, in a lot of ways financing is a “bad deal” in that it costs more money, but might be a “great deal” because you can actually get a car you need to earn money to live with it, and you’d starve before you could save up thousands of dollars for a car.
notapantsday@feddit.de 1 year ago
“Bad deal” in this case is purely from a mathematics point of view.
For example, you have camera equipment worth $2000 and there’s a 10 percent chance something happens and you make a successful claim with the insurance in the next ten years. So on average, you get 10% of $2000 (=$200) from the insurance within 10 years. Per year, that makes $20. If you’re paying more than $20 a year, you’re spending more than you can expect to get back - on average.
Obviously, those are arbitrary numbers and they could be way off. But the insurance company will do the maths right to make sure they earn more than they spend. And it’s in their best interest to avoid customers who are likely to cost them more than they receive.
Of course there are cases where making a bad deal in a mathematical sense can still be beneficial overall. Your car loan is a good example, health insurance is another. And if photography really is the only thing that brings you joy, then you can accept a “bad deal” to make sure you can keep pursuing you hobby,
But an insurance is never a good way to save money. On a case-by-case basis, it can be, but on average, it isn’t. It’s like playing in a casino, you can leave with more money than you had before, but on average, the bank always wins (unless you’re cheating).
Insurance companies are very good at taking more money from you than they give back. The ones who don’t aren’t around anymore.
jmp242@sopuli.xyz 1 year ago
Oh, I agree with that. I don’t think anyone was thinking of insurance as an investment (except perhaps some interesting Youtube people and mutual whole life insurance policies), so this just seems like a weird way to think about it. Just like people who go to a casino - rational people aren’t looking at it as any sort of investment or deal, but paying for a certain type of entertainment.
I also wonder who’s looking at Insurance as a way to make them money? It’s to either smooth out costs without a required ramp up time (i.e. you might be able to dedicate $20 a year to self-insuring your camera gear, but better hope nothing happens for 10 years which BTW is getting close to the useful lifetime of the gear.) or to improve piece of mind. $150 a year to literally think of my risk with my camera gear going out / using it at $100 vs $11,000? That’s really cheap to me.