Is there insurance in an Objective world?

[musashi]

This is a great topic for a new thread, so I’ve pulled it out of a discussion about people in need.

Apologies, maybe my phrasing is not accurate. When I say collectivist, I see insurance as an institution where many join to spread the risk of injuries that happen to a few. Maybe to use that word there also has to be a compulsory aspect.

It is a collective type situation, but maybe there is a better word to describe it than collectivist. What would you suggest?

You seem to say this like a bunch of people got together and agreed that they would all put funds into some account to help each other. This is not the case.

Insurance companies (good ones) do not get together is such a way. They look for a large market of people, and then advertise their services as an insurance company -- for selfish reasons. When one gets insurance, one should not say, "I am doing good for my fellow men", one should say, "I am protecting myself in case something bad happens".

You seem to be taking it from the opposite perspective. The only insurance company that comes to existence in the way that you described is an government one. And those bastards would be ruining all other private insurance companies.

While you are right about how insurance companies do "spread the risk", that is not an insurance companies goal, so it can not be anything even pertaining to collectivism.

I think we are looking at this situation with two different perspectives. If I may, your perspective centers around the creativity and effort of the insurance company.

My perspective is that of the market. The fact is that bad things do happen, and we have these actuarial sickos that can identify the small fraction of people that will be effected. And so even though only a few will be effected the many share a common risk. So yes the many do get together and pool their premiums to cover these catastrophes. The insurance company to me is just a middleman providing a service and receiving a proportionate payment. To me, the market exists independent of the individual who created the insurance company. Alternatives would always arise to address that underlying need (the unseen hand of the economy). I don’t consider the insurance company in a heroic light. In fact I see their role as persistently corruptible. When you centralize power by definition you create the opportunity for corruption.

This is a great topic because there is voluntary insurance and compulsory insurance. And even the compulsory insurance has both a private and a public aspect.

And example of compulsory private insurance might be PMI or homeowner’s insurance. Of course you can avoid these insurances by either not owning a home, or by holding enough equity to opt out of them. But if you are not in either of these two groups you gotta pay.

[Oleksandr]

Musashi, you seem to be making the error in switching context.

The intention of one's action and a possible view of the outcome isn't interchangeable, and yet you do it here.

Even though, you could look at it as people covering others' problems by stepping outside of the scope of individual action, that's what not they are doing at all as individuals, so you have to be really careful not to forget about that.

Otherwise, you could say that any business company is collectivist because all employees appear to be working towards the same goal. But that's not what they could be doing at all.

And forced insurance isn't even a topic worth discussing. It's a pure negation of right to property.

[Trilori]

Well what do you think insurance is? You pay a premium and the insurance company's hope is you won't need a claim and as long as you don't make claims your money keeps coming in like interest (a very big amount) and they keep building their wallet pretty soon someone files a claim its a loss but they have enough to cover the claim and yet more people are still paying their premiums and the cycle continues.

Basically if you buy into insurance YOU ARE PAYING for everyone else's problem including your own but hey when YOU file a claim, they will be paying for YOUR problems.

[musashi]

Musashi, you seem to be making the error in switching context.

The intention of one's action and a possible view of the outcome isn't interchangeable, and yet you do it here.

Even though, you could look at it as people covering others' problems by stepping outside of the scope of individual action, that's what not they are doing at all as individuals, so you have to be really careful not to forget about that.

Otherwise, you could say that any business company is collectivist because all employees appear to be working towards the same goal. But that's not what they could be doing at all.

And forced insurance isn't even a topic worth discussing. It's a pure negation of right to property.

I need some help here, I'm not sure I understand. Could you break it down a little more?

What about that PMI insurance? Isn't that forced? It is basically a three party deal (Borrower – Lender – Insurer). The Lender will not provide a 90% loan without PMI. The Lender is compelling the Borrower buy PMI. But by your statement, the PMI payments would be the property that is negated correct?