EVE Search - Insurance: Check My Math

All Channels

Ships and Modules

Insurance: Check My Math

» Click here to find additional results for this topic using Google

Monitor this thread via RSS [?]

Pages: [1] :: one page
Author	Thread Statistics \| Show CCP posts - 0 post(s)
Pasus Nauran Amarr	Posted - 2009.12.18 04:58:00 - [1] Was just talking with a corp-mate, and he was saying that he was looking into it and insurance is never worthwhile. Here's his math: Return on Platinum = 100% ship cost Cost of Platinum = 30% ship cost = 70% ROI Base (free) Return = 40% ship cost So if you take the 30% ship cost you would've spent on Platinum insurance and hold it with an alt, then your ship is destroyed (and you get the default 40% insurance) you also end up with a net 70% ROI. Essentially he says the 30% cost of Platinum is lost, and thus both options equalize, with the benefiot that not insuring doesn't expire. Trying to wrap my head around this (it's late) but something seems off to me.
Kirzath Blackwater Syndicate	Posted - 2009.12.18 05:16:00 - [2] What?
Sandeep	Posted - 2009.12.18 05:17:00 - [3] Let's say ship costs 800000 ISK to you from market, insurance costs 300000 ISK (platinum), and insurance will pay 1000000 ISK at 100%, or 400000 ISK at 40%. Uninsured: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) Your ship blows up You gained 400000 ISK You lost a ship TOTAL: You lost 400000 ISK. =================== Insured and lost it within the insured period: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) You insure ship to platinum level You lost 300000 ISK Step 3) Your ship blows up You gained 1000000 ISK You lost a ship TOTAL: You lost 100000 ISK. =================== Insured and lost it outside the insured period: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) You insure ship to platinum level You lost 300000 ISK Step 3) Your ship blows up after insurance expired You gained 400000 ISK You lost a ship TOTAL: You lost 700000 ISK. So insure your ship if you think you will lose it in 10 weeks. /thread
Lady Australia	Posted - 2009.12.18 05:23:00 - [4] Originally by: Sandeep Let's say ship costs 800000 ISK to you from market, insurance costs 300000 ISK (platinum), and insurance will pay 1000000 ISK at 100%, or 400000 ISK at 40%. Uninsured: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) Your ship blows up You gained 400000 ISK You lost a ship TOTAL: You lost 400000 ISK. =================== Insured and lost it within the insured period: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) You insure ship to platinum level You lost 300000 ISK Step 3) Your ship blows up You gained 1000000 ISK You lost a ship TOTAL: You lost 100000 ISK. =================== Insured and lost it outside the insured period: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) You insure ship to platinum level You lost 300000 ISK Step 3) Your ship blows up after insurance expired You gained 400000 ISK You lost a ship TOTAL: You lost 700000 ISK. So insure your ship if you think you will lose it in 10 weeks. your maths is way out, 40% of an uninsured 8m ship is not 4m for a start. Insurance is best used for large corporations/alliances as a cheap alternative to ship replacements for their members. member buys original ship, corp pays insurance, and it only costs the corp the cost of platinum insurance each time you lose it.
Sandeep	Posted - 2009.12.18 05:30:00 - [5] Originally by: Lady Australia your maths is way out, 40% of an uninsured 8m ship is not 4m for a start. When you say "8m ship" do you mean it costs 8 mil to get one, or the platinum payout = 8 mil? /thread
Pasus Nauran Amarr	Posted - 2009.12.18 05:44:00 - [6] Edited by: Pasus Nauran on 18/12/2009 05:45:44 Edited by: Pasus Nauran on 18/12/2009 05:45:13 I realize my OP may have been confusing. So to clarify my corp-mate's thought is that the insurance cost (30% of hull value) is lost as soon as the insurance is purchased. So Platinum insurance never works out to more than 70% of the hull value (100% payout - 30% insurance cost). By contrast, not insuring still returns 40% of the hull value, and costs nothing. So if you take the insurance cost (30% of hull value) that you would've paid for platinum insurance, and bank it in case of ship destruction, the "payout" (including the banked money) works out to the same 70% of the hull cost.
Kirzath Blackwater Syndicate	Posted - 2009.12.18 05:54:00 - [7] Platinum insurance pays more than 100% of the ship's mineral value afaik.
Kassa Daito Capital Construction Research	Posted - 2009.12.18 05:57:00 - [8] Edited by: Kassa Daito on 18/12/2009 06:05:24 Originally by: Kirzath Platinum insurance pays more than 100% of the ship's mineral value afaik. A quick history lesson: NPCs used to buy and sell minerals (in the form of refinable modules) some time ago. As the market developed, these price ceilings and floors have gradually disappeared and insurance is more or less the only price floor left. The current insurance values are based on those old NPC rates, not current market prices, so sometimes they are below market value and sometimes they are above it (occasionally by enough to make it profitable to build and self-destruct ships with purchased minerals). Originally by: Pasus Nauran By contrast, not insuring still returns 40% of the hull value, and costs nothing. So if you take the insurance cost (30% of hull value) that you would've paid for platinum insurance, and bank it in case of ship destruction, the "payout" (including the banked money) works out to the same 70% of the hull cost. You're subtracting/adding the 30% to both sides. That's why you're coming up with an incorrect number. You can't both add the cost to the uninsured side of the equation and take it away from the insured payout. It actually works out as: Uninsured = 40% - 0% = 40% payout Insured = 100% - 30% = 70% payout So, if you lose a ship during the first period of insurance, you have 30% above if you hadn't insured it. If you lose it during the 2nd period, then you break even. Basically, you buy insurance for anything with a median life expectancy < 6 months. How much less depends on your cost of capital and that varies from person to person. You could also figure in a "moral hazard" effect as well but that's really getting a bit too complicated for a relatively small decision. As a general rule, PVP ships are better insured while seldomly used ships or empire PVE ships are not (T1 or T2 have ABSOLUTELY NO EFFECT on whether it should be insured or not). ** Disclaimer: Author sometimes spell checks but is not responsible for sins of commission, omission, emission, transmission, or submission. Flowers, bricks, or any other form of feedback appreciated
Necronous	Posted - 2009.12.18 06:11:00 - [9] Edited by: Necronous on 18/12/2009 06:16:21 Imaginary Ship Base Value - 100ISK Platinum Payout (100ISK) - Platinum Insurance (30ISK) = 70 ISK pocketed Uninsured Payout (40ISK) + Money You Didn't Spend on Insurance (30ISK) = 70 ISK pocketed Don't insure ships folks :-) P.S. There's sarcasm there, here's the REAL math Platinum Payout (100ISK) - Platinum Insurance (30ISK) + Money You'll Started With (30ISK) = 100 ISK pocketed Uninsured Payout (40ISK) + Money You Didn't Spend on Insurance (30ISK) = 70 ISK pocketed It's a math fallacy you brought up. Let's say you literally started with only a 100ISK ship and 30ISK cash.... you spend the 30 ISK and the self destuct ... NET: 100ISK in your wallet. Now do it again without insurance: 70ISK in your wallet. Your fallacy assume you STARTED with 0 ISK
Haram Haram	Posted - 2009.12.18 12:59:00 - [10] Also, is the isk (30% of the basevalue) you paid for the platinum really 30% of the isk you paid(marketvalue) for your ship?
Seriously Bored Minmatar	Posted - 2009.12.18 14:34:00 - [11] Edited by: Seriously Bored on 18/12/2009 14:34:15 I've always been a fan of real examples... Say you have 100m in your pocket and you want a Hurricane. You're pretty sure you're going to lose it, so you're trying to decide if you should insure it or not. 100m - 28m (market Hurricane price) - 11m (plat insurance) + 36.5m payout = 97.5m You lose 2.5m in the process. Say you decided to stay uninsured: 100m - 28m (Cane) + 14.6m payout = 86.6m 97.5 - 86.6 = 10.9m difference in final wallet amount....oddly enough, that's enough isk to have bought insurance again. These numbers work out regardless of the market price of the ship. After insurance and payout, you will always be up the exact amount of isk it would have cost to insure the ship for platinum again. So yes, whether your ship is T1 or T2, worth way more than the insurance cost or slightly less, insure it if you think there's a good chance you'll lose it.
Smakma byatchup	Posted - 2009.12.18 15:49:00 - [12] Originally by: Seriously Bored Edited by: Seriously Bored on 18/12/2009 14:34:15 I've always been a fan of real examples... Say you have 100m in your pocket and you want a Hurricane. You're pretty sure you're going to lose it, so you're trying to decide if you should insure it or not. 100m - 28m (market Hurricane price) - 11m (plat insurance) + 36.5m payout = 97.5m You lose 2.5m in the process. Say you decided to stay uninsured: 100m - 28m (Cane) + 14.6m payout = 86.6m 97.5 - 86.6 = 10.9m difference in final wallet amount....oddly enough, that's enough isk to have bought insurance again. These numbers work out regardless of the market price of the ship. After insurance and payout, you will always be up the exact amount of isk it would have cost to insure the ship for platinum again. So yes, whether your ship is T1 or T2, worth way more than the insurance cost or slightly less, insure it if you think there's a good chance you'll lose it. Bear with me here, maths isn't my strong point. You don't get a payout on an uninsured ship (or am I wrong?), so you'd have 72mil left in wallet. Where does the 14.6mil come from?
Pasus Nauran Amarr	Posted - 2009.12.18 16:00:00 - [13] Originally by: Smakma byatchup Bear with me here, maths isn't my strong point. You don't get a payout on an uninsured ship (or am I wrong?), so you'd have 72mil left in wallet. Where does the 14.6mil come from? All ships have default insurance of 40% market value. So if you decide not to insure a ship and lose it, you'll still be paid that 40%. Thanks all for clearing it up. I was thinking it over while trying to get to sleep last night and came up with the conclusion that he was double-subtracting the 30%.
Ki Tarra Ki Tech Industries	Posted - 2009.12.18 16:01:00 - [14] Here is the short version of insurance mechanics: Insurance payout is increased by 2x the cost of buying insurance. Therefore, if the odds of losing your ship during the insurance term is greater than 50/50, it is wise to insure the ship. The cost of the ship verses the insurable amount is irrelavant. The only other significant consideration is the convience of buying insurance: ie it is not worth a trip back from 0.0 just to insure a frigate. Here is the short version of insurance fraud mechanics: If you can buy the ship from the market for "significantly" less than 70% of the ships base price, then it is worthwhile to buy-insure-destoy the ship. What constitutes "significantly" depends on the value of your time.
Smakma byatchup	Posted - 2009.12.18 16:13:00 - [15] Edited by: Smakma byatchup on 18/12/2009 16:15:59 Originally by: Pasus Nauran All ships have default insurance of 40% market value. So if you decide not to insure a ship and lose it, you'll still be paid that 40%. I didn't know that, thx. I won't be insuring my missions ship again
Dacryphile	Posted - 2009.12.19 19:16:00 - [16] The other day someone was selling ravens for 75M. Platinum Insurance was ~31M Payout was ~108M Total ship + insurance = 106M Payout upon destruction = 108M Profit up on destruction = 2M Initially I was self destructing, but that took too long (2M per 2 minutes still isn't too bad) so I enlisted concord's help to insta pop me at every undock without having to wait out the 2 minute self destruct timer. Originally by: Doc Robertson ...take a good look at this pic and tell us which one is you.
Ghoest	Posted - 2009.12.19 20:53:00 - [17] If 2 players buy identical ships. Player A doesnt insure his ship. Player B buys Plat insurance for his ships. Both players get blown up. Player B will have more isk and than player A. This is all that matters. If there is a high probability you will lose your T1 ships then buy Plat insurance. Wherever you went - Here you are.
Pr0Vaporizer	Posted - 2009.12.19 21:52:00 - [18] Originally by: Ghoest If 2 players buy identical ships. Player A doesnt insure his ship. Player B buys Plat insurance for his ships. Both players get blown up. Player B will have more isk and than player A. This is all that matters. If there is a high probability you will lose your T1 ships then buy Plat insurance. Quoted for great justice.
Bella Bella	Posted - 2010.02.18 20:04:00 - [19] Originally by: Sandeep Let's say ship costs 800000 ISK to you from market, insurance costs 300000 ISK (platinum), and insurance will pay 1000000 ISK at 100%, or 400000 ISK at 40%. Uninsured: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) Your ship blows up You gained 400000 ISK You lost a ship TOTAL: You lost 400000 ISK. =================== Insured and lost it within the insured period: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) You insure ship to platinum level You lost 300000 ISK Step 3) Your ship blows up You gained 1000000 ISK You lost a ship TOTAL: You lost 100000 ISK. =================== Insured and lost it outside the insured period: Step 1) Buy ship You lost 800000 ISK You gained a ship Step 2) You insure ship to platinum level You lost 300000 ISK Step 3) Your ship blows up after insurance expired You gained 400000 ISK You lost a ship TOTAL: You lost 700000 ISK. So insure your ship if you think you will lose it in 10 weeks. By that math it is effective to only insure your ship 2 times over, lose 1mil first insure, second insure lose 4mil third insure would lose 7mil, equal to to uninsured loss
NoNah	Posted - 2010.02.18 20:31:00 - [20] Originally by: Bella Bella By that math it is effective to only insure your ship 2 times over, lose 1mil first insure, second insure lose 4mil third insure would lose 7mil, equal to to uninsured loss Not entirely true. Once one month has elapsed, it doesn't really matter what you paid(or didn't pay) in insurance that month. Only question is wether you are going to lose it in the next 3 months, or not. If you keep your ships for 8 months each time, you should still insure it right before you blow it up. And if you don't know when it'll blow up it's really rather irrelevant, as you're betting on the odds of it blowing up. If you blow your ships up less often than every 21 weeks on average you should not insure them, more often and you should. Parrots, commence! Postcount: 270595
Myra Rodan Minmatar Borderlands corp True Reign	Posted - 2010.02.18 20:33:00 - [21] I disagree with the only insure T1 statements. If you are fairly certain you will lose your ship within the timeframe the insurance covers, always insure it. Here's why: For ease of example, we'll say insurance values your ship at 1M. Without buying full coverage, you will receive 40% = 400k when you lose it. The cost to fully insure the ship is 30% = 300k, but you will now receive 100% = 1M. The difference between these two amounts you receive is 60% = 600k. 600k extra payment - 300k cost to receive that payment = 300k more than you would have had. This is exactly like gambling on 2x odds. You are betting that you will lose your ship within the 10 weeks covered by the insurance. If you lose your bet, and the ship is not destroyed in that timeframe, you just lose the amount you bet. If you win the bet, you receive 2x what the bet was, which means you will receive the amount of your bet (putting you at 0) plus that same amount more than you started with. You end up with an amount equal to what you spent on the insurance more than you would have had otherwise. That math works the same whether the total you end up with is enough to cover the cost of a replacement ship (most T1 ships) or not (any T2 ship). You receive an extra amount equal to what you paid that you would not have had otherwise. I don't know if that made things more or less clear, but there it is. Selling and delivering boosters anywhere in Eve.
Diomidis Amarr Mythos Corp RAZOR Alliance	Posted - 2010.02.18 20:55:00 - [22] If you cannot lose a ship for 9 straight months when you actually fly it regularly in PVP = you are darn good = an insurance contract by yourself. Good job. Join the Biggest Greek Corp! www.Mythos-eve.com - Join Mythos Channel in game!
Nitrogendixoide Old Farts Club DEFI4NT	Posted - 2010.02.18 21:07:00 - [23] Edited by: Nitrogendixoide on 18/02/2010 21:09:48 Edited by: Nitrogendixoide on 18/02/2010 21:08:03 Just keep in mind that having insurance can make you use your ship in a more risky fashion (the so called moral hazard), reducing or even negating the advantage you might get from insurance. For instance, suppose you're more careful with your 4 million isk ship when you don't have insurance. You're so careful that only only loose it once every 3 insurance periods. At the end of those three periods you loose your ship ending up 4 million in the hole because you had no insurance. Now suppose that you take much greater risks with your ships when they are insured. In fact, you always loose your ship half way through the policy period. You end up paying 24 million for the 6 ships, plus 6 million for the insurance for all them. You get back the 24 million, but you're still 6 million in the hole for insurance payments. In fact, you're 2 million more in the hole than if you hadn't insured your ships and had been more careful.
Cataca	Posted - 2010.02.18 22:26:00 - [24] Well, to say things more practical. The platinum insurance of the dominix is about 60mil the base price of plat insurance is 15mil. Now, considering that a dominix doesnt cost more than 45mil on the market, i cant really say that it would be smart to not insure your ship.
Vherr Arkhar	Posted - 2010.02.18 23:31:00 - [25] Edited by: Vherr Arkhar on 18/02/2010 23:31:28 Whats so difficult to calculate? Player A and Player B both both get a 100 Mill ISK ship. A) Insures it (and needs the extra 30 Mill) B) Thinks insurance is dumb. (he has no extra ISK) A and B both die. A) gets 100 Mill ISK B) gets 40 Mill ISK A) now has exactly 100 Mill ISK (out of 130) B) now has 40 Mill ISK (out of 100) A) has a net loss of 30 Mill B) has a net loss of 60 Mill So for paying 130% of the ships price, Player A reduces his net loss in case of fail by 50%.
NoNah	Posted - 2010.02.19 00:02:00 - [26] Originally by: Vherr Arkhar Edited by: Vherr Arkhar on 18/02/2010 23:31:28 Whats so difficult to calculate? Player A and Player B both both get a 100 Mill ISK ship. A) Insures it (and needs the extra 30 Mill) B) Thinks insurance is dumb. (he has no extra ISK) A and B both die. A) gets 100 Mill ISK B) gets 40 Mill ISK A) now has exactly 100 Mill ISK (out of 130) B) now has 40 Mill ISK (out of 100) A) has a net loss of 30 Mill B) has a net loss of 60 Mill So for paying 130% of the ships price, Player A reduces his net loss in case of fail by 50%. If that was the case, awesome. No problems with it at all. However, the figures you mention are not _quite_ what you speak of(even if they all add up). Prices are today about 65-75% of base value, on market. That is, you can buy many ships at less than insurance platinum delta. This would mean: A and B both buys a ship for 65 mil. A insures it(need an extra 35 mil) B doesn't insure it. A and B bot dies. A gets 105 mil back, starting at 100 mil total. B gets 42 mil back, starting at 65 mil total. One takes a 5 mil profit, where the other makes a 23 mil loss.(before equipment) Of course the impact this has on EVE is that people will A) ****fit their ships as equipment is the ONLY thing that costs. B) Refrain from using t2 and t3 ships as the loss is IMMENSE compared to t1. For example, a t1 fit domi can be bought(without rigs) for less than a mil total replacement cost. That means you can lose about 4-600 domis per t3, not even counting the skill loss. On market this also has the effect that faction modules get more expensive, t1 is priced after availability and effort rather than cost of production, numbers are more important than fitting and tactics, very small price deviations on t1 as it all revolves around the insurance price cap. A high starting barrier to get your first ship, but once that's done the replacement cost is neglectable. Highsec missions gets better profits, as minerals have set values unrelated to supply vs demand, wheras mining suffer from logistic issues(you need to get highends or lowends from somewhere). In short, it causes a very polarized gameplay and it'll just get worse over time. Insurance, be gone! Parrots, commence! Postcount: 73755

Pages: [1] :: one page
First page \| Previous page \| Next page \| Last page

COPYRIGHT NOTICE
EVE Online, the EVE logo, EVE and all associated logos and designs are the intellectual property of CCP hf. All artwork, screenshots, characters, vehicles, storylines, world facts or other recognizable features of the intellectual property relating to these trademarks are likewise the intellectual property of CCP hf. EVE Online and the EVE logo are the registered trademarks of CCP hf. All rights are reserved worldwide. All other trademarks are the property of their respective owners. CCP hf. has granted permission to EVE-Search.com to use EVE Online and all associated logos and designs for promotional and information purposes on its website but does not endorse, and is not in any way affiliated with, EVE-Search.com. CCP is in no way responsible for the content on or functioning of this website, nor can it be liable for any damage arising from the use of this website.