"Did you know that home insurers use aerial drones to study your rooftop? If the conditions signal neglect, they might cancel your coverage before an accident."
While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.
This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets, which implies increased future risk of loss.
In fact, I received a letter from my homeowners insurance company a couple years ago stating that they would not renew our coverage due to conditions that they'd observed (clearly from aerial imagery) including overgrown bushes touching the walls of the house and some larger tree branches growing over the house.
I had a landscaping company come and fix the issues, sent my own drone up to take new pictures, sent the company the pictures, and they agreed to continue coverage. And now my house has less future risk of damage. This seems like a win-win for both of us.
The issue is that often the data gathered and used with no consideration of other evidence. For example, I had a similar situation of home insurance sending a letter demanding I replace my roof based on drone footage. No issue was immediately obvious from the footage and we had just replaced the roof less than 5 years earlier. We had an inspection done and then sent both proof of replacement and the inspection report. We were told the drone footage alone would be used in their decision, and we still had to replace the roof to keep coverage.
So it is not necessarily objective, fairly considered observations (and I think pretty different from speeding tickets). At least in our case it was maximally for the benefit of the insurer. I think that is relevant to their claimed premise.
> This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets
This is more like your insurer following you around and evaluating your driving skills.
And yes black boxes are a thing but a) are opt-in and b) universally reviled.
The problem is that every facet they add to the analysis increases the complexity, making it harder to price risk - meaning they'll eagerly overprice [0] (based on "what if") with some idea that "the market" (ie nobody) will sort it out. This creates a race to the bottom against anything that might seem "weird", aka regular people just living their lives (while being focused on), similar to how the ever growing housing bubble has painted most houses beige.
Your bushes only seem like a reasonable example because you are looking at them in isolation - it was only a single issue you had to deal with, and something you seemingly wanted to deal with anyway. If they had instead blasted you with a litany of different issues, or a bush that you wanted to keep for sentimental reasons, or you simply didn't have the time/resources to create your own counter-documentation and operate their heavyweight bureaucracy, you'd be singing a much different tune.
And while these things can happen anyway with regular in-person home inspections, the point is that increasing surveillance and unaccountable "AI" make it much easier to bury customers in a deluge of complexity making for even-less-competitive markets.
(I would give a healthy list of examples of my own home being deficient in many ways an insurance inspector would call out yet are in the process of being managed, but I'm sure it would just invite a lot of "well ackshually"
out of touch responses from people who don't know which end of a screwdriver to hold)
[0] Notice how they weren't going to raise your premiums by $30 a year or whatever, but outright cancel your policy - in other words a massive overweighting of the actual risk from some bushes growing into the house.
Vegetation is the enemy in forest fires, for example. One of the main reasons that lone house survived the Maui wildfire[0] was because they properly managed vegetation, which prevented the embers from setting fire to the property via a bush that's way too close. Nothing prevents you from letting the rest of your backyard go wild if you prefer, but keep it away from your walls.
> While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.
I mean, it's good for the insurance company to help it make more profit, but it undermines the arrangement of how insurance works, so I would argue it's not what they should be doing from a societal perspective, and there should be regulation that stops them doing that.
If you take it to the extreme of them being able to tell with 100% certainty who's going to need a payout when, they'll just arrange it so they'll never need to pay out. They'll not do or stop doing contracts with those that will need a payout, or they'll raise the premiums such that they still gain. Insurance would become pointless and customers are better off saving for their own expenses.[1]
I've made this comment before. I'll just quote myself on the basics of how insurance works, to make this point clear:
> With regards to insurance, that industry depends on ignorance. If an insurance company had perfect information (psychic, precognition level) on who's going to need a payout when and who's never, then the point of the insurance becomes nil. They're not going to enter contracts with individuals that result in a net loss, only with those that result in a net gain. That can look like them just raising prices until it results in a gain. If that's the case, people can just save and use their own money to cover the events that will happen, because insurance would not be of any benefit to anyone at all.
> The way insurance works on a basic level is they know a percentage of people will have a set of events happen to them, but they don't know who. They have a large amount of clientele and charge everyone such that the revenue can cover the expenses of the unlucky percentage of their clientele and make a profit. To the individual, the insurance expense results in significantly less than what they would pay would they be part of the unlucky percentage without the insurance cover.
> The arrangement is founded on the ignorance of who belongs to the unlucky percentage. The economics of insurance don't work without the ignorance. So yeah, at some point, algorithmic pricing of insurance likely ought to be banned if we still want insurance to exist on a meaningful level.
[1] As a parenthesis, that's in a closed system sort of way. In reality, the fact that a lot of people would still get insurance because "that's responsible" means end providers can raise their prices on the assumption that most of their customers are the insurance companies and insurance companies "are rich", so there would still be a price difference. That's kind of what you see with health insurance where people that are not insured can get lower prices than those that are, such that it may end up even cheaper than the copay. That's for example, kinda what can be seen with styropyro's healthcare story:
> 5:39 so my insurance denies the CAT scan right I mean that's a really really common move for health insurance they just like to blanket deny procedures
> 6:21: but uh but the stupid part is is then I got billed $3,300 for that scan with insurance and the even dumber part is that I I got a quote from my clinic on what it would cost me without insurance and it was only $1,400 so because I have this insurance it actually cost me more money to get this scan like how is that how is that even possible that is the stupidest thing in the world
I imagine he can't see it because of the stress and anger, but that's probably exactly why the insurance denied it, because they were being billed way to high by the provider. If the provider billed the company what they billed regular people, they likely wouldn't deny them at the start. There's a limit to what anyone can pay, even insurance companies, and they have to put a stop at some point.
Back to the original point, imagine what that looks like with end providers that don't provide separate pricing between the insured and the non-insured, and where most people have insurance. The end provider would just give the higher pricing, the one for presumably rich insurance companies, so you'd still would save money with the insurance despite the fact that you'd save even more if the insurance companies didn't exist.
Anyway, this is a separate problem from insurance companies investigating too much and undermining how insurance works for their own profit.
Which is why we're entering that fun stage of capitalism where the winners have won enough that they just buy up any possible competition in the market, and regulators absolutely fail to enforce any sort of anti-trust/anti-monopoly measures because they're just another thing that's been bought up.
Nothing like
- Major bank consolidation
- Major media condolidation
- Major tech consolidation
- Major grocery store consolidation
etc... to really provide wonderful competitive options.
In short -we should have our nose rubbed in something we have no ability to control. Cool.
I'm pretty sure that the pervasiveness and the inability to do anything about it is what the person you're referring to meant by 'exhausting', though I may be projecting what I find exhausting about the topic!
> Uber is another key villain in Gouged. Per Owens, Uber’s “greatest innovation wasn’t ‘disrupting’ the taxi industry—it was socializing and normalizing the very idea of dynamic pricing. They made us comfortable with the notion that prices could change at any moment.”
In my opinion, Uber has several key innovations over traditional taxi services:
* An accurate machine-provided fare quote that you can review at your leisure before agreeing to take a trip. (Instead of, like, calling a human dispatcher to ask for a quote.)
* The fact that the passenger can't screw over the driver by making fake requests and not showing up, or running off at the end of a trip - because the online platform is in charge of the payment collection.
* The fact that the driver can't screw the passenger over by driving extra distance, because the price is set ahead of time.
> roughly 75 percent of the items in identical Instacart baskets purchased at the same time varied in price from one shopper to the next
If the price differential is large enough, it sets up an opportunity for arbitrage. Maybe if 10 people cooperate and compare notes on each of their Instacart account's product prices, and then make group purchases using the account with the lowest prices...
In general, it's harder (though not impossible) to price-discriminate on goods rather than services. If seniors get a grocery discount for example, then it might be worthwhile to hire a senior to purchase things on your behalf.
I see progressives continue their tried and true playbook of trying to contort language to fit the narrative. Now targeted pricing is “gouging”, because of course everyone knows gouging is awful, therefore to make sure this sounds awful we’ll call it gouging. I’m surprised they didn’t try to call it a cost genocide or pricephobia.
A yes, capitalism; a system that works perfectly as long as communication and data processing technology is innefficent enough to put a natural efficiency limit on all firms. Reminds me of the scandal around rental price "collusion", which ultimately was kinda just really effective software for doing stuff that would normally be fine.
*ETA:* And FWIW, the author here goes about as far towards that as they can -- a shoutout at the end! Anything else would be decried as biased, after all. Great article; shame it'll soon be downranked by the wonderful machines running this place :(
Are you under the mistaken impression that chronic homelessness is caused by lack of housing supply? It’s much more correlated with mental illness and addiction in people who can’t be forced into care, but still desperately need it.
It’s not exactly a cryptic relationship, and it implies the need for more than just housing, people need serious inpatient care or structures outpatient programs and those are hard to fund. It’s doubly challenging because of how the US mental health system changed in the 1980’s… very much for the worse.
At least you didn’t assume I was arguing against housing.
I love that you just Googled sources and didn't even read them
your first source says verbatim: "One of the main causes of homelessness is the lack of affordable housing". it also doesn't link addiction or mental illness as a cause - it describes that the rates are higher in unhoused populations
a brief thought experiment: if you were unhoused, living on the streets, barely enough money for food and water, your body exposed to the weather, knowing that society looks down on you at worst or ignores you at best, how would your mental health fare?
well, according to your second source:
> It can be more challenging for people who are homeless to stop using substances, because they may not have easy access to treatment, often have smaller social support networks, may have decreased motivation to quit drugs or alcohol, and may have other, higher priorities, such as finding housing or food
it's almost like being unhoused itself causes cycles of addiction because at least the drugs take the pain away for a short stint?
your third source similarly contradicts your initial claim:
>For years, ending chronic homelessness was thought to be a multi-step process, with individuals receiving treatment for addictions and illnesses, perhaps while living in transitional or temporary housing, before being found capable of living on their own. However, the strategy for ending homelessness has changed, largely due to research pioneered by housing providers. Instead of requiring chronically homeless individuals to be "housing ready" by first addressing issues thought to underlie homelessness, the new strategy allows chronically homeless individuals to move into permanent supportive housing without preconditions.
either find better sources or actually read the research you're citing, learn from them, and stop making unfounded and ludicrous claims you can't even back up
...did you just link to "American Addiction Centers" as proof that the root cause of homelessness in the US is drug addiction? I... I can't believe this is the level of rigor that justifies such horrible cruelty. Just mind boggling.
Are you under the mistaken impression that housing is not a human right? Do you protest your taxes being too high in response to this argument? They're much more correlated with the total number of children in 3rd world countries that got blown up in a given year. I can't force you to care, but you still desperately need it. Fiscally, it's asinine to talk about the costs associated with this if you refuse to care about the actual holes in the US's pocketbook.
If you don’t want to respond honestly to my question that’s your right, but at least don’t get on a soapbox over it. This is HN not TikTok. You aren’t impressing anyone by avoiding the question with a deflecting rant.
That feels like a worthy critique but I'm not sure it relates? That's just how capitalism prioritizes capital over anything else, which is the core problem of course but isn't super related to the problems of increasing information. In fact, wouldn't this technique get harder to pull off as renters have access to better and better tools themselves?
I wouldn’t expect it to; better information, without power to act on it, doesn’t do much.
That said, this’d be one of those things where you can say “this is my prediction”, and if it doesn’t come true, go looking for the forces and factors you missed from your initial prediction.
"Did you know that home insurers use aerial drones to study your rooftop? If the conditions signal neglect, they might cancel your coverage before an accident."
While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.
This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets, which implies increased future risk of loss.
In fact, I received a letter from my homeowners insurance company a couple years ago stating that they would not renew our coverage due to conditions that they'd observed (clearly from aerial imagery) including overgrown bushes touching the walls of the house and some larger tree branches growing over the house.
I had a landscaping company come and fix the issues, sent my own drone up to take new pictures, sent the company the pictures, and they agreed to continue coverage. And now my house has less future risk of damage. This seems like a win-win for both of us.
The issue is that often the data gathered and used with no consideration of other evidence. For example, I had a similar situation of home insurance sending a letter demanding I replace my roof based on drone footage. No issue was immediately obvious from the footage and we had just replaced the roof less than 5 years earlier. We had an inspection done and then sent both proof of replacement and the inspection report. We were told the drone footage alone would be used in their decision, and we still had to replace the roof to keep coverage.
So it is not necessarily objective, fairly considered observations (and I think pretty different from speeding tickets). At least in our case it was maximally for the benefit of the insurer. I think that is relevant to their claimed premise.
I wouldn't accept a five-year old report either. Stuff can change in five months.
Pretty sure they had the inspection done at the time of rejection.
> This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets
This is more like your insurer following you around and evaluating your driving skills.
And yes black boxes are a thing but a) are opt-in and b) universally reviled.
In normal places that's what police is for, but the decisions were made.
The problem is that every facet they add to the analysis increases the complexity, making it harder to price risk - meaning they'll eagerly overprice [0] (based on "what if") with some idea that "the market" (ie nobody) will sort it out. This creates a race to the bottom against anything that might seem "weird", aka regular people just living their lives (while being focused on), similar to how the ever growing housing bubble has painted most houses beige.
Your bushes only seem like a reasonable example because you are looking at them in isolation - it was only a single issue you had to deal with, and something you seemingly wanted to deal with anyway. If they had instead blasted you with a litany of different issues, or a bush that you wanted to keep for sentimental reasons, or you simply didn't have the time/resources to create your own counter-documentation and operate their heavyweight bureaucracy, you'd be singing a much different tune.
And while these things can happen anyway with regular in-person home inspections, the point is that increasing surveillance and unaccountable "AI" make it much easier to bury customers in a deluge of complexity making for even-less-competitive markets.
(I would give a healthy list of examples of my own home being deficient in many ways an insurance inspector would call out yet are in the process of being managed, but I'm sure it would just invite a lot of "well ackshually" out of touch responses from people who don't know which end of a screwdriver to hold)
[0] Notice how they weren't going to raise your premiums by $30 a year or whatever, but outright cancel your policy - in other words a massive overweighting of the actual risk from some bushes growing into the house.
Vegetation as the enemy, that is a sad consequence.
Vegetation is the enemy in forest fires, for example. One of the main reasons that lone house survived the Maui wildfire[0] was because they properly managed vegetation, which prevented the embers from setting fire to the property via a bush that's way too close. Nothing prevents you from letting the rest of your backyard go wild if you prefer, but keep it away from your walls.
[0] https://www.npr.org/2023/08/24/1195331310/red-roof-house-fir...
> While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.
I mean, it's good for the insurance company to help it make more profit, but it undermines the arrangement of how insurance works, so I would argue it's not what they should be doing from a societal perspective, and there should be regulation that stops them doing that.
If you take it to the extreme of them being able to tell with 100% certainty who's going to need a payout when, they'll just arrange it so they'll never need to pay out. They'll not do or stop doing contracts with those that will need a payout, or they'll raise the premiums such that they still gain. Insurance would become pointless and customers are better off saving for their own expenses.[1]
I've made this comment before. I'll just quote myself on the basics of how insurance works, to make this point clear:
https://news.ycombinator.com/item?id=49820825
> With regards to insurance, that industry depends on ignorance. If an insurance company had perfect information (psychic, precognition level) on who's going to need a payout when and who's never, then the point of the insurance becomes nil. They're not going to enter contracts with individuals that result in a net loss, only with those that result in a net gain. That can look like them just raising prices until it results in a gain. If that's the case, people can just save and use their own money to cover the events that will happen, because insurance would not be of any benefit to anyone at all.
> The way insurance works on a basic level is they know a percentage of people will have a set of events happen to them, but they don't know who. They have a large amount of clientele and charge everyone such that the revenue can cover the expenses of the unlucky percentage of their clientele and make a profit. To the individual, the insurance expense results in significantly less than what they would pay would they be part of the unlucky percentage without the insurance cover.
> The arrangement is founded on the ignorance of who belongs to the unlucky percentage. The economics of insurance don't work without the ignorance. So yeah, at some point, algorithmic pricing of insurance likely ought to be banned if we still want insurance to exist on a meaningful level.
[1] As a parenthesis, that's in a closed system sort of way. In reality, the fact that a lot of people would still get insurance because "that's responsible" means end providers can raise their prices on the assumption that most of their customers are the insurance companies and insurance companies "are rich", so there would still be a price difference. That's kind of what you see with health insurance where people that are not insured can get lower prices than those that are, such that it may end up even cheaper than the copay. That's for example, kinda what can be seen with styropyro's healthcare story:
https://www.youtube.com/watch?v=1162ouPHH3Q
> 5:39 so my insurance denies the CAT scan right I mean that's a really really common move for health insurance they just like to blanket deny procedures
> 6:21: but uh but the stupid part is is then I got billed $3,300 for that scan with insurance and the even dumber part is that I I got a quote from my clinic on what it would cost me without insurance and it was only $1,400 so because I have this insurance it actually cost me more money to get this scan like how is that how is that even possible that is the stupidest thing in the world
I imagine he can't see it because of the stress and anger, but that's probably exactly why the insurance denied it, because they were being billed way to high by the provider. If the provider billed the company what they billed regular people, they likely wouldn't deny them at the start. There's a limit to what anyone can pay, even insurance companies, and they have to put a stop at some point.
Back to the original point, imagine what that looks like with end providers that don't provide separate pricing between the insured and the non-insured, and where most people have insurance. The end provider would just give the higher pricing, the one for presumably rich insurance companies, so you'd still would save money with the insurance despite the fact that you'd save even more if the insurance companies didn't exist.
Anyway, this is a separate problem from insurance companies investigating too much and undermining how insurance works for their own profit.
Competition, and being willing to shop around is the only thing that has ever kept prices down.
Which is why we're entering that fun stage of capitalism where the winners have won enough that they just buy up any possible competition in the market, and regulators absolutely fail to enforce any sort of anti-trust/anti-monopoly measures because they're just another thing that's been bought up.
Nothing like
- Major bank consolidation
- Major media condolidation
- Major tech consolidation
- Major grocery store consolidation
etc... to really provide wonderful competitive options.
I'm just waiting for the class action suits when dynamic pricing is shown to disproportionately affect protected groups.
At 176 pages I may read it but also I’m already so exhausted by this topic since nothing is changing.
It is changing. It's accelerating, spreading, and getting worse all the time.
In short -we should have our nose rubbed in something we have no ability to control. Cool.
I'm pretty sure that the pervasiveness and the inability to do anything about it is what the person you're referring to meant by 'exhausting', though I may be projecting what I find exhausting about the topic!
Insurance companies "from each according to his ability, to each according to our needs".
All of this is GosPlan with extra steps anyways. It works better with those extra steps and makes people believe too, so I can't complain
> Uber is another key villain in Gouged. Per Owens, Uber’s “greatest innovation wasn’t ‘disrupting’ the taxi industry—it was socializing and normalizing the very idea of dynamic pricing. They made us comfortable with the notion that prices could change at any moment.”
In my opinion, Uber has several key innovations over traditional taxi services:
* An accurate machine-provided fare quote that you can review at your leisure before agreeing to take a trip. (Instead of, like, calling a human dispatcher to ask for a quote.)
* The fact that the passenger can't screw over the driver by making fake requests and not showing up, or running off at the end of a trip - because the online platform is in charge of the payment collection.
* The fact that the driver can't screw the passenger over by driving extra distance, because the price is set ahead of time.
> roughly 75 percent of the items in identical Instacart baskets purchased at the same time varied in price from one shopper to the next
If the price differential is large enough, it sets up an opportunity for arbitrage. Maybe if 10 people cooperate and compare notes on each of their Instacart account's product prices, and then make group purchases using the account with the lowest prices...
In general, it's harder (though not impossible) to price-discriminate on goods rather than services. If seniors get a grocery discount for example, then it might be worthwhile to hire a senior to purchase things on your behalf.
I see progressives continue their tried and true playbook of trying to contort language to fit the narrative. Now targeted pricing is “gouging”, because of course everyone knows gouging is awful, therefore to make sure this sounds awful we’ll call it gouging. I’m surprised they didn’t try to call it a cost genocide or pricephobia.
“Drones are racist, just like clear nail polish and white paint (ah and math)”
A yes, capitalism; a system that works perfectly as long as communication and data processing technology is innefficent enough to put a natural efficiency limit on all firms. Reminds me of the scandal around rental price "collusion", which ultimately was kinda just really effective software for doing stuff that would normally be fine.
*ETA:* And FWIW, the author here goes about as far towards that as they can -- a shoutout at the end! Anything else would be decried as biased, after all. Great article; shame it'll soon be downranked by the wonderful machines running this place :(
You mean like withholding units from the market to overcharge renters when there’s people sleeping on the streets? Totally fine.
Are you under the mistaken impression that chronic homelessness is caused by lack of housing supply? It’s much more correlated with mental illness and addiction in people who can’t be forced into care, but still desperately need it.
Your empirical claims are extremely incorrect, but regardless this whole discussion will be shut down. Shame -- it really was a good article :(
https://www.humanrightsresearch.org/post/the-intersection-of...
https://americanaddictioncenters.org/rehab-guide/addiction-s...
https://www.samhsa.gov/communities/homelessness-programs-res...
https://www.congress.gov/crs-product/R44302#_Toc437336722
It’s not exactly a cryptic relationship, and it implies the need for more than just housing, people need serious inpatient care or structures outpatient programs and those are hard to fund. It’s doubly challenging because of how the US mental health system changed in the 1980’s… very much for the worse.
At least you didn’t assume I was arguing against housing.
I love that you just Googled sources and didn't even read them
your first source says verbatim: "One of the main causes of homelessness is the lack of affordable housing". it also doesn't link addiction or mental illness as a cause - it describes that the rates are higher in unhoused populations
a brief thought experiment: if you were unhoused, living on the streets, barely enough money for food and water, your body exposed to the weather, knowing that society looks down on you at worst or ignores you at best, how would your mental health fare?
well, according to your second source:
> It can be more challenging for people who are homeless to stop using substances, because they may not have easy access to treatment, often have smaller social support networks, may have decreased motivation to quit drugs or alcohol, and may have other, higher priorities, such as finding housing or food
it's almost like being unhoused itself causes cycles of addiction because at least the drugs take the pain away for a short stint?
your third source similarly contradicts your initial claim:
>For years, ending chronic homelessness was thought to be a multi-step process, with individuals receiving treatment for addictions and illnesses, perhaps while living in transitional or temporary housing, before being found capable of living on their own. However, the strategy for ending homelessness has changed, largely due to research pioneered by housing providers. Instead of requiring chronically homeless individuals to be "housing ready" by first addressing issues thought to underlie homelessness, the new strategy allows chronically homeless individuals to move into permanent supportive housing without preconditions.
either find better sources or actually read the research you're citing, learn from them, and stop making unfounded and ludicrous claims you can't even back up
...did you just link to "American Addiction Centers" as proof that the root cause of homelessness in the US is drug addiction? I... I can't believe this is the level of rigor that justifies such horrible cruelty. Just mind boggling.
I linked to multiple sources, why cherry-pick the one you deem the weakest?
Are you under the mistaken impression that housing is not a human right? Do you protest your taxes being too high in response to this argument? They're much more correlated with the total number of children in 3rd world countries that got blown up in a given year. I can't force you to care, but you still desperately need it. Fiscally, it's asinine to talk about the costs associated with this if you refuse to care about the actual holes in the US's pocketbook.
If you don’t want to respond honestly to my question that’s your right, but at least don’t get on a soapbox over it. This is HN not TikTok. You aren’t impressing anyone by avoiding the question with a deflecting rant.
That feels like a worthy critique but I'm not sure it relates? That's just how capitalism prioritizes capital over anything else, which is the core problem of course but isn't super related to the problems of increasing information. In fact, wouldn't this technique get harder to pull off as renters have access to better and better tools themselves?
I wouldn’t expect it to; better information, without power to act on it, doesn’t do much.
That said, this’d be one of those things where you can say “this is my prediction”, and if it doesn’t come true, go looking for the forces and factors you missed from your initial prediction.
It was not the efficient algorithm, but the pooling of the data that was considered to be collusion.