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Sawn Aconite
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Posted - 2010.03.11 20:04:00 -
[1]
Hi folks, I haven;t posted on the forums before - I usually stick to the tweetfleet (http://twitter.com/SawnAconite) but this discussion seems to have outgrown the 140 character limit so I thought I would post here.
Anyway, since the insurance system is such a bone of contention in new eden myself and some of my corpmates were thinking we might try and improve things by offering our own insurance.
We are planning to offer a much more flexible system which we think will be more appealing than the standard insurance for a number of people. We will be offering :
* Insurance for T2 ships * Insurance which covers modules and cargo * Insurance which covers certain areas (empire-only, lo-sec, nullsec etc) * No-claims bonus
This means that you haulers could insure their ships and cargo, and Hulk pilots could effectively insure themselves against ganking - both of which aren't possible in the in-built insurance system.
So, I was hoping to start a discussion about this and see if anyone would be interested in this kind of service?
Comments, questions, suggestions all welcome
Cheers
Sawn
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baltec1
Antares Shipyards Phalanx Alliance
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Posted - 2010.03.11 20:06:00 -
[2]
no.
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Doctor Cal'torien
Gallente The Vikings of the Black Sea
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Posted - 2010.03.11 20:07:00 -
[3]
sounds like a great start to a perfect scam. Tip: don't cut and run until you have many multiple pilots insured, also if this isn't a scam someone's gonna use it to scam you...
that's my 5 1/2 cents -_-_-_-_-_-_-_-_-_-_-_-_-_-_-
Originally by: CCP Shadow
Originally by: Doctor Cal'torien in before the "OP lacks content + witty dialogue" from Shadow
*click* You just did it for me.
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Matalino
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Posted - 2010.03.11 20:10:00 -
[4]
Originally by: Doctor Cal'torien if this isn't a scam someone's gonna use it to scam you...
This!
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Balsakian McGiggles
Caldari The Tuskers
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Posted - 2010.03.11 20:13:00 -
[5]
I'd be extremely interested in such a policy. I understand that there isn't any guarantee that it's not a scam, but I figure it would be worth a shot! It definitely would make me more willing to fly those expensive T2 ships!
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Viktrus
Caldari Mine 'N' Refine The Unforgiven Alliance
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Posted - 2010.03.11 20:19:00 -
[6]
Originally by: Balsakian McGiggles I'd be extremely interested in such a policy. I understand that there isn't any guarantee that it's not a scam, but I figure it would be worth a shot! It definitely would make me more willing to fly those expensive T2 ships!
Greatness comes at a risk. If you cannot afford to lose it, simply don't fly it. This has always been a great aspect of EVE. Whats the fun of blowing up some punk if he gets all his money back?
Last thing i want to see is a bunch of giddy people flying marauders in PVP because they can afford to lose it now.. there'd be no point in flying anything but T2, and new players would be at an even further disadvantage, which is discouraging.
Theres my 2 cents.
-Vik |
Tulisin Dragonflame
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Posted - 2010.03.11 20:28:00 -
[7]
The only reason we have insurance in EVE is because the NPC insurance company are idiots.
You could possibly insure T2 mission-running ships, because those are a closer allegory to real-life goods where you're trying to risk them as little as possible.
But insuring the vast majority of ships in EVE would be like insuring a monster truck driver on his way to a rally. It just doesn't make sense.
It has been tried before, and is workable on paper, but there'd be so much overhead it probably wouldn't be worth it.
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Reem Fairchild
Minmatar Punic Corp.
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Posted - 2010.03.11 20:29:00 -
[8]
This can't work in Eve. Anyone trying to do it is either a scammer or about to get scammed.
And even if you somehow could enforce honesty on both sides, it still could never work profitably. ----- 'In Eve, as in real life, if you are bored it's your own fault.' |
baltec1
Antares Shipyards Phalanx Alliance
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Posted - 2010.03.11 20:29:00 -
[9]
Originally by: Viktrus
Originally by: Balsakian McGiggles I'd be extremely interested in such a policy. I understand that there isn't any guarantee that it's not a scam, but I figure it would be worth a shot! It definitely would make me more willing to fly those expensive T2 ships!
Greatness comes at a risk. If you cannot afford to lose it, simply don't fly it. This has always been a great aspect of EVE. Whats the fun of blowing up some punk if he gets all his money back?
Last thing i want to see is a bunch of giddy people flying marauders in PVP because they can afford to lose it now.. there'd be no point in flying anything but T2, and new players would be at an even further disadvantage, which is discouraging.
Theres my 2 cents.
-Vik
They guy is offering the service not ccp
Which means he or someone else is going to get bitten hard.
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Caroline Cosmos
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Posted - 2010.03.11 20:38:00 -
[10]
Originally by: baltec1 no.
Hell no.
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Alice Celadon
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Posted - 2010.03.11 20:45:00 -
[11]
This gets brought up in Market Discussions twice a month. It is a waste of space.
Here's a suggestion: go look at how insurance companies in real life make profit. The act of insuring is almost never profitable. ... ---Herein lay a detailed description of how insurance companies essentially are big liquidity vehicles, that they make money off being able to invest cash on hand, and liquid cash is very much not the problem in Eve, investment opportunities are. Honestly, I'm sick of explaining it, and I doubt you'd care or get it.--- ... THIS IS AN AWESOME IDEA AND NO ONE HAS THOUGHT OF IT! GOOD LUCK DEAR SIR OF AWESOME! IT WILL WORK PERFECTLY!
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Tippia
Reikoku IT Alliance
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Posted - 2010.03.11 20:55:00 -
[12]
I don't quite see the attraction of the suggested service.
I can get pretty much the same result by just using the SCC, buying back-up ships off the market and/or every now and then roll an alt and hand out millions in newbie corp chat… so why bother with this? ——— “If you're not willing to fight for what you have in ≡v≡… you don't deserve it, and you will lose it.” — Karath Piki |
Sawn Aconite
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Posted - 2010.03.11 21:09:00 -
[13]
Originally by: Doctor Cal'torien sounds like a great start to a perfect scam. Tip: don't cut and run until you have many multiple pilots insured, also if this isn't a scam someone's gonna use it to scam you...
that's my 5 1/2 cents
Yeah I appreciate what you are saying - trust is a valuable commodity in new eden! One suggestion from the tweetfleet folks was to use a trusted middle-man (someone like Chribba for example.)
Obviously fraud is a major issue but this is no different to insurance in the real world - it can hopefully be adressed by having higher premiums for newer users (perhaps not insuring brand new accounts at all) and obviously increased premiums following claims.
I think the final point would be to have an excess in the same way as real world insurance meaning that any user would have to pay an agreed amount of ISK up front before the insurance payout kicked in. This should also stop people being too reckless e.g. auto-pilotting through losec simply because they were insured!
Cheers
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Jmarr Hyrgund
The Bastards
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Posted - 2010.03.11 21:11:00 -
[14]
There are a few problems with this. The biggest one is getting people to believe that it isn't a scam. the rest are technical in nature.
Real life insurance companies rely on less people claiming than paying the premiums. In EVE, eventually everyone is going to claim.
Real life insurance companies have large portfolios of assets of varying types backing them up (Look at AIG, they did it wrong, had a load of backup assets that were ultimately worthless and went bust) There simply isn't the kind of finanical system available in new eden to create these assets to give the Insurance company a solid base of capital to work from.
How would you go about calculating risk? I'd love to let an actuary loose in EVE's high risk world but it would be a full time job and they don't come cheap (in RL money).
Insurance isn't simply a case of betting against someone getting their ship blown up (if it was you'd be onto a loser every time). Its incredibly complex and the systems aren't in place to support it.
Pirate - Blogger - Rifter Pilot |
Sawn Aconite
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Posted - 2010.03.11 21:16:00 -
[15]
Originally by: Viktrus
Originally by: Balsakian McGiggles I'd be extremely interested in such a policy. I understand that there isn't any guarantee that it's not a scam, but I figure it would be worth a shot! It definitely would make me more willing to fly those expensive T2 ships!
Greatness comes at a risk. If you cannot afford to lose it, simply don't fly it. This has always been a great aspect of EVE. Whats the fun of blowing up some punk if he gets all his money back?
Last thing i want to see is a bunch of giddy people flying marauders in PVP because they can afford to lose it now.. there'd be no point in flying anything but T2, and new players would be at an even further disadvantage, which is discouraging.
Theres my 2 cents.
-Vik
I think there has to always be an incentive not to be reckless as otherwise no insurance company could make money - increased premiums following losses and an excess would help to ensure that pilots didn't get silly with ships, but it would still provide safety in that you could in effect fly something you couldn't afford - even if that does break the first law of Eve!
Cheers
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Sawn Aconite
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Posted - 2010.03.11 21:22:00 -
[16]
Originally by: Tulisin Dragonflame The only reason we have insurance in EVE is because the NPC insurance company are idiots.
You could possibly insure T2 mission-running ships, because those are a closer allegory to real-life goods where you're trying to risk them as little as possible.
But insuring the vast majority of ships in EVE would be like insuring a monster truck driver on his way to a rally. It just doesn't make sense.
It has been tried before, and is workable on paper, but there'd be so much overhead it probably wouldn't be worth it.
I take your point and I admit I don't know exactly how profitable a venture like this could be - I am more interested at this stage in how practical it would be and if anyone is interested in the service.
I think any ship is potentially insurable provided the terms are clear. For example you could insure a mission running ship with the clauses that it is only covered in high-sec and is only covered to loss via NPC rats. Conversely a cargo hauler could be covered for loss to other pilots but not NPCs and so on. Obviously the more complete the insurance the more expensive the premium, but I think it could work. It is this flexibility I feel the in-built system is lacking.
Cheers
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Doctor Cal'torien
Gallente The Vikings of the Black Sea
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Posted - 2010.03.11 21:25:00 -
[17]
plus of course the, If I don't feel like paying out your insirance you can suck it premeum, and the: "I'm planning on suiciding it against miners" clause -_-_-_-_-_-_-_-_-_-_-_-_-_-_-
Originally by: CCP Shadow
Originally by: Doctor Cal'torien in before the "OP lacks content + witty dialogue" from Shadow
*click* You just did it for me.
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Alice Celadon
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Posted - 2010.03.11 21:26:00 -
[18]
Originally by: Sawn Aconite
Originally by: Viktrus
Originally by: Balsakian McGiggles I'd be extremely interested in such a policy. I understand that there isn't any guarantee that it's not a scam, but I figure it would be worth a shot! It definitely would make me more willing to fly those expensive T2 ships!
Greatness comes at a risk. If you cannot afford to lose it, simply don't fly it. This has always been a great aspect of EVE. Whats the fun of blowing up some punk if he gets all his money back?
Last thing i want to see is a bunch of giddy people flying marauders in PVP because they can afford to lose it now.. there'd be no point in flying anything but T2, and new players would be at an even further disadvantage, which is discouraging.
Theres my 2 cents.
-Vik
I think there has to always be an incentive not to be reckless as otherwise no insurance company could make money - increased premiums following losses and an excess would help to ensure that pilots didn't get silly with ships, but it would still provide safety in that you could in effect fly something you couldn't afford - even if that does break the first law of Eve!
Cheers
You are talking out of your butt. Here is how successful insurance would work in EVE: joe pilot loses his deimos every 7 days. Sawn Aconite Awesome Insurance requires all joe pilots to pay out the price of a deimos for every 6 days of insured flying. Even this wouldn't work, because then only jill pilot, who knows she loses a ship every 5 days, will take the insurance.
I made a thread for you: http://www.eveonline.com/ingameboard.asp?a=topic&threadID=1283262
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Sawn Aconite
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Posted - 2010.03.11 21:28:00 -
[19]
Originally by: Tippia I don't quite see the attraction of the suggested service.
I can get pretty much the same result by just using the SCC, buying back-up ships off the market and/or every now and then roll an alt and hand out millions in newbie corp chatà so why bother with this?
The service really is designed to appeal to people whose needs aren't covered by the existing insurance system. For example someone hauling a lot of valuable assets - because the existing insurance system doesn't cover cargo, only the ship, they have to stomach a big loss if they get ganked.
Similarly T2 pilots can't really insure their ships as the payout bears no relation to the cost of the ship (never mind fittings etc.) I think a user-run system could provide the flexibility to allow a solution to be tailored for varied playstyles. It certainly isn't for everyone, but I think it could work well for freighter pilots etc.
Cheers
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Sawn Aconite
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Posted - 2010.03.11 21:34:00 -
[20]
Originally by: Jmarr Hyrgund There are a few problems with this. The biggest one is getting people to believe that it isn't a scam. the rest are technical in nature.
Real life insurance companies rely on less people claiming than paying the premiums. In EVE, eventually everyone is going to claim.
Real life insurance companies have large portfolios of assets of varying types backing them up (Look at AIG, they did it wrong, had a load of backup assets that were ultimately worthless and went bust) There simply isn't the kind of finanical system available in new eden to create these assets to give the Insurance company a solid base of capital to work from.
How would you go about calculating risk? I'd love to let an actuary loose in EVE's high risk world but it would be a full time job and they don't come cheap (in RL money).
Insurance isn't simply a case of betting against someone getting their ship blown up (if it was you'd be onto a loser every time). Its incredibly complex and the systems aren't in place to support it.
I think slow and steady growth is the key to acquiring capital to cover losses but if you wanted to act as a rl insurance company you could sell the debt on to somebody else - that's not something I want to think about right now though!
One of my corpmates who originally suggested this idea has some experience with insurance of things like aircraft carriers etc in the real world which is probably more relevant to new eden in terms of calculating risk! That doesn't apply to every ship though - this is really designed more for things like marauders, exhumers, freighters etc which are likely to have a fairly long life.
Cheers
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Sawn Aconite
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Posted - 2010.03.11 21:44:00 -
[21]
Originally by: Alice Celadon
You are talking out of your butt. Here is how successful insurance would work in EVE: joe pilot loses his deimos every 7 days. Sawn Aconite Awesome Insurance requires all joe pilots to pay out the price of a deimos for every 6 days of insured flying. Even this wouldn't work, because then only jill pilot, who knows she loses a ship every 5 days, will take the insurance.
I made a thread for you: http://www.eveonline.com/ingameboard.asp?a=topic&threadID=1283262
Thanks for your passionate replies, this is obviously something you are interested in so I appreciate the feedback. I think the system you are describing is somewhat simplistic though - I think people destroying ships at that rate would generate such high premiums that it would not be worth their while getting insurance at all quite quickly i.e. the premium coupled with the excess would be more than the cost of the ship. Meanwhile others would build up a reputation as a good risk, meaning lower premiums and a system which really works for them and gives them peace of mind when they are out and about in apace.
Cheers
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CCP Shadow
Caldari C C P
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Posted - 2010.03.11 21:51:00 -
[22]
Thread moved to Market Discussions.
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Ji Sama
Caldari Tash-Murkon Prime Industries United Corporations Of Modern Eve
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Posted - 2010.03.11 21:52:00 -
[23]
Originally by: CCP Shadow Thread moved to Market Discussions.
Thank you.
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Vaal Erit
Science and Trade Institute
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Posted - 2010.03.11 21:55:00 -
[24]
I go fit 10x estamel's invul fields (real or fake doesn't matter) into my iteron one I go insure my cargo under your system I gank my ship with my alt/friend You pay me for 10x estamel's invulns via our insurance contract I loot the 5x estamel's that dropped from my wreck with my alt/friend I profit, you go broke. gg nore
You haven't even mentioned API yet so this reeks of fail. You might want to do your homework first.
Originally by: Jim Raynor EVE needs danger, EVE needs risks, EVE needs combat, even piracy, without these things, the game stagnates to a trivial game centering around bloating your wallet with no purpose. |
Sawn Aconite
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Posted - 2010.03.11 22:07:00 -
[25]
Originally by: Vaal Erit I go fit 10x estamel's invul fields (real or fake doesn't matter) into my iteron one I go insure my cargo under your system I gank my ship with my alt/friend You pay me for 10x estamel's invulns via our insurance contract I loot the 5x estamel's that dropped from my wreck with my alt/friend I profit, you go broke. gg nore
You haven't even mentioned API yet so this reeks of fail. You might want to do your homework first.
Now if we all gave up on something just because someone had failed before where would we be?
Seriously though thank you for your comment, this is exactly the sort of issue which springs to mind as soon as you think about any kind of insurance. I think though that it comes down to how well you are able to calculate risk and put a price on it - fraud is obviously a huge potential issue (as in rl) but I don't think it need be insurmountable. I guess it is more a question of whether you can ensure you have more good risks than bad on your books and those deemed a potentially bad risk are given more incentive to fly safe. For example as an unknown pilot who wants to insure an Iteron I for 100m to cover cargo your excess and premium would obviously be very high initially, then over time it would come down - you would effectively be paying initially to prove you are a good risk, as is the case in lots of types of insurance irl.
Cheers
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Turiel Demon
Minmatar Celtic industries F A I L
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Posted - 2010.03.11 22:21:00 -
[26]
Originally by: Ji Sama
Originally by: CCP Shadow Thread moved to Market Discussions.
Thank you.
I second that sentiment...
If you can't beat Eris, join her, hmmm that sounded so much better in my head - Cortes Don't be greedy :P -Cap |
Kat Bandeis
Caldari Wacom Research
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Posted - 2010.03.11 22:26:00 -
[27]
Would I like to have decent insurance on a few of my T2 ships? Hell yeah.
Am I going to "buy" that insurance from another player? You're kidding, right?
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Valemora
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Posted - 2010.03.11 22:28:00 -
[28]
For discussions sake, who says you have to insure the entire ship. Why not say we will insure 100m at 10m a week, anything over that limit is not covered. With a 5 week order upfront so 60m to start, so if they were scammed in week 1, yes they lose money, but the insurer could drop the client and after awhile you get those legit users. so if you fly a 200m isk ship, they could insure 100m of it, then if you scammed you would or could lose money rather than make it.
Yea removing people from scamming would be a pain
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Sawn Aconite
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Posted - 2010.03.11 23:40:00 -
[29]
Originally by: Kat Bandeis Would I like to have decent insurance on a few of my T2 ships? Hell yeah.
Am I going to "buy" that insurance from another player? You're kidding, right?
Why not? You presumably bought the ship from another player, why not insure it with another player?
Cheers
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.11 23:41:00 -
[30]
Originally by: Sawn Aconite I think though that it comes down to how well you are able to calculate risk and put a price on it - fraud is obviously a huge potential issue (as in rl) but I don't think it need be insurmountable.
Excellent point - but assuming that 99% of policies will have a claim in the first period, how would one price the policies? -----------------------------------------------
- Who Dares, Wins
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Sawn Aconite
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Posted - 2010.03.11 23:48:00 -
[31]
Originally by: Valemora For discussions sake, who says you have to insure the entire ship. Why not say we will insure 100m at 10m a week, anything over that limit is not covered. With a 5 week order upfront so 60m to start, so if they were scammed in week 1, yes they lose money, but the insurer could drop the client and after awhile you get those legit users. so if you fly a 200m isk ship, they could insure 100m of it, then if you scammed you would or could lose money rather than make it.
Yea removing people from scamming would be a pain
Thanks for your post - that's definitely an interesting point. I think the flexibility that dealing with a real person can offer is what could make the system work. Obviously there would be a learning period (in which the corp would probably be exposed to scams of every shape and colour and lose a lot of isk) but I feel that there could be a workable system in there somewhere - whether it works out to be profitable or not i'm not really too worried about
Cheers
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Sawn Aconite
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Posted - 2010.03.12 00:07:00 -
[32]
Originally by: Drab Cane
Originally by: Sawn Aconite I think though that it comes down to how well you are able to calculate risk and put a price on it - fraud is obviously a huge potential issue (as in rl) but I don't think it need be insurmountable.
Excellent point - but assuming that 99% of policies will have a claim in the first period, how would one price the policies?
Yeah that's the same thing I am wondering about - maybe it will take a little trial and error. Obviously some pilots will be flagged as a bad risk and wouldn't be offered insurance but it is a case of excluding as many of those without excluding safer pilots. Probably the safest way to do that would be to treat everyone as a bad risk initially and then lower premiums based on a no-claims bonus, just like rl insurance. Whether or not a new venture can get off the ground using that approach though I don't know!
Cheers
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Akita T
Caldari Caldari Navy Volunteer Task Force
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Posted - 2010.03.12 00:07:00 -
[33]
In EVE, as opposed to RL, people DO NOT insure ships when they are pretty sure they WON'T lose them. In EVE, people insure ships when there's a high chance they WILL lose them.
Even if both you and your customers are 100% honest and nobody is trying to scam anybody, you will still end up in one of two scenarios: you either will have to ask for a premium so high (70%-90% of insured value) almost nobody will bother using your insurance, or you will be unable to make any profits (in fact, you will keep losing ISK forever).
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Beginner's ISK making guide | Manufacturer's helper | All about reacting _
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Zea Aestria
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Posted - 2010.03.12 02:27:00 -
[34]
Originally by: Akita T you will still end up in one of two scenarios: you either will have to ask for a premium so high (70%-90% of insured value) almost nobody will bother using your insurance, or you will be unable to make any profits (in fact, you will keep losing ISK forever).
These are not mutually exclusive. I would bet that you would end up with both of these scenarios.
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Sawn Aconite
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Posted - 2010.03.12 09:58:00 -
[35]
Originally by: Akita T In EVE, as opposed to RL, people DO NOT insure ships when they are pretty sure they WON'T lose them. In EVE, people insure ships when there's a high chance they WILL lose them.
Even if both you and your customers are 100% honest and nobody is trying to scam anybody, you will still end up in one of two scenarios: you either will have to ask for a premium so high (70%-90% of insured value) almost nobody will bother using your insurance, or you will be unable to make any profits (in fact, you will keep losing ISK forever).
Isn't that because there is only one type of insurance available though? For example something like a blockade runner is a pretty safe ship to fly but I can see that some would like to insure the ship and its cargo 'just in case' - obviously this has to be cost effective for them but for these sorts of ships (as well as exhumers, freighters etc) I think many would see them as worth insuring for a couple of million a week just for the added security of knowing that should they get ganked or should something go wrong they won't have lost everything. The extra security would allow you to invest more of your liquid assets in your cargo in this case which could mean the insurance pays for itself with increased profits.
Cheers
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Akita T
Caldari Caldari Navy Volunteer Task Force
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Posted - 2010.03.12 10:10:00 -
[36]
Originally by: Sawn Aconite Isn't that because there is only one type of insurance available though?
The EVE insurance model would make you go bankrupt in RL pretty damn fast (it pays out much MORE than it brings in).
Originally by: Sawn Aconite For example something like a blockade runner is a pretty safe ship to fly but I can see that some would like to insure the ship and its cargo 'just in case' - obviously this has to be cost effective for them but for these sorts of ships (as well as exhumers, freighters etc) I think many would see them as worth insuring for a couple of million a week just for the added security of knowing that should they get ganked or should something go wrong they won't have lost everything.
And how exactly do you plan to price this ? And what makes you think people that usually DO NOT get caught and killed would realy want to purchase your insurance at all in the first place ? Last but not least, don't you think that having it (even partially) insured will make them more likely to pay less attention, therefore making a claim much more likely ?
You're basically back to square one again : in order for an insurance to work, you have to cash in more ISK than you'll have to pay out. In RL, most people insure just about everything if the insurance companies let them, because losing something is quite nasty (as opposed to EVE where you can recover relatively easily). In EVE, people only insure stuff when they plan to do something risky.
Take the example of Hulks - for how much would you insure them, fees and payouts ? Say you insure hulks for 10 mil a week and pay out 100 mil if they get destroyed. If and only if the average lifespan of a Hulk of a person who would trust you to be 100% honest is over 10 weeks, then you can start making a profit. Now, enter some event similar to Hulkageddon, and your business might see a spike in customers - but also your payouts will start to look horrible.
Set the insurance fee too high, nobody will bother to come to you. Set it too low, and you won't make ISK. Set the payout too high, face insurance fraud. Set it too low, and again nobody will bother. Set it just right, and then the market price of the ship drops, and you might face insurance fraud again.
Long story short, too much work, too little pay, a lot of risk. Not even worth thinking about it.
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Beginner's ISK making guide | Manufacturer's helper | All about reacting _
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Taua Roqa
Minmatar Toroidal Bum-Donuts
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Posted - 2010.03.12 11:12:00 -
[37]
Originally by: CCP Shadow Thread moved to Market Discussions.
t-t-t-thread k-k-k-killer!
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Cyaxares II
Gallente The Scope
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Posted - 2010.03.12 11:23:00 -
[38]
not again...
maybe somebody could compile a collection of past T2 insurance threads in the stickies?
same discussion pops up every few months and each time there is less content than the previous time
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Sawn Aconite
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Posted - 2010.03.12 12:13:00 -
[39]
Originally by: Akita T
And how exactly do you plan to price this ? And what makes you think people that usually DO NOT get caught and killed would realy want to purchase your insurance at all in the first place ? Last but not least, don't you think that having it (even partially) insured will make them more likely to pay less attention, therefore making a claim much more likely ?
You're basically back to square one again : in order for an insurance to work, you have to cash in more ISK than you'll have to pay out. In RL, most people insure just about everything if the insurance companies let them, because losing something is quite nasty (as opposed to EVE where you can recover relatively easily). In EVE, people only insure stuff when they plan to do something risky.
Take the example of Hulks - for how much would you insure them, fees and payouts ? Say you insure hulks for 10 mil a week and pay out 100 mil if they get destroyed. If and only if the average lifespan of a Hulk of a person who would trust you to be 100% honest is over 10 weeks, then you can start making a profit. Now, enter some event similar to Hulkageddon, and your business might see a spike in customers - but also your payouts will start to look horrible.
Set the insurance fee too high, nobody will bother to come to you. Set it too low, and you won't make ISK. Set the payout too high, face insurance fraud. Set it too low, and again nobody will bother. Set it just right, and then the market price of the ship drops, and you might face insurance fraud again.
Long story short, too much work, too little pay, a lot of risk. Not even worth thinking about it.
I think that's right - that is why I was asking if anyone was interested and why I thought it was more of a general post than a market post. Obviously people are only going to buy insurance if it provides something for them - but it needn't necessarily be because they expect to lose the ship, it could just be because the extra security could allow them to make more money. For example, many haulers may find a route wqhich is profitable for 200m isk worth of stuff, but they only take 100m because they know if they get ganked they need some isk to fall back on. That is the sort of situation I see insurance as being useful for. They take the full 200m instead because they know that no matter how unlikely they are to not make it they are covered so can take the risk, this means they make more money through trading a higher volume, the insurance company makes money from the premium and whoever has the buy and sell orders filled are happy too. Everybody wins
Now I realise you guys are probably correct and that this is rather an optimistic view of how things could work, but I am happy enough to put some isk towards trying it out, and if it crashes and burns it at least makes for a cool story, and next time someone suggests it we can sticky this thread as a warning
Cheers
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Akita T
Caldari Caldari Navy Volunteer Task Force
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Posted - 2010.03.12 13:17:00 -
[40]
Originally by: Sawn Aconite For example, many haulers may find a route wqhich is profitable for 200m isk worth of stuff, but they only take 100m because they know if they get ganked they need some isk to fall back on. That is the sort of situation I see insurance as being useful for. They take the full 200m instead because they know that no matter how unlikely they are to not make it they are covered so can take the risk, this means they make more money through trading a higher volume, the insurance company makes money from the premium and whoever has the buy and sell orders filled are happy too. Everybody wins
Except that now, since he loaded up on the full 200 mil instead of just 100 mil, he's MUCH more likely to get suicide-ganked, and he just passes all that risk over to you instead, and you pass it to the rest of your customers, so actually, everybody loses EXCEPT THE GANKERS. Also, who's to say he won't simply collaborate with the gankers to defraud you on purpose ?
Yes, hopelessly optimistic, your expectations. Also, you're not the first, and certainly not the last to suggest this - it comes up a couple of times each year, if not even more often.
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Beginner's ISK making guide | Manufacturer's helper | All about reacting _
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Taerna Kallintte
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Posted - 2010.03.12 13:45:00 -
[41]
I would love to see something like this so I can find niches where the T2 ships are mismatched with premium, overproduce said T2 craft, destroy them, and get reimbursed to increase my ca$h flow.
As someone who underwrites catastrohpe insurance IRL, I am positive you won't get the price right, and I'm definitely positive there are many, many people like me blowing up stuff in EvE for insurance fruad. Because, well... there is absolutely no drawback to fraud the EvE Ins. Co.
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Sawn Aconite
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Posted - 2010.03.12 14:23:00 -
[42]
Clearly insurance wouldn't cover self-destructing (or being killed by a corpmate, concord etc) so it wouldn't be as straightforward as that to commit fraud but I agree that collaboration with someone else would be very difficult to address - investigating fraud would be a tough job, just as it is irl I guess. The question really I suppose is how quickly you can identify and drop a bad risk - the quicker you can do this the less cost you have and so the lower the premiums need to be for those who aren't trying to cheat the system.
I think there are lots of ways to limit the potential for fraud though, just as there is irl - a significant excess for those with no history would obviously limit how much you could rip off, and the amount of time it took to process and pay out a claim would limit how many times they could repeat the process, that and the fact they would be denied any insurance pretty quickly!
Cheers
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Dzil
Caldari SafeHouse Investments of Tautology
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Posted - 2010.03.12 14:38:00 -
[43]
I think the problem with this topic is that even though 90+% of the playerbase feels it's too vulnerable/a waste of time, we really have no practical evidence: no one's tried it (or at least, no one's come forward with their results). When people say "does a bank work in EVE?" we can show them the burned out husks of EBANK, DBANK, etc. When people say "does player run insurance work in EVE?" we can offer only theory.
Dzil's Corp Sales - 200m |
Sawn Aconite
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Posted - 2010.03.12 15:40:00 -
[44]
Originally by: Dzil I think the problem with this topic is that even though 90+% of the playerbase feels it's too vulnerable/a waste of time, we really have no practical evidence: no one's tried it (or at least, no one's come forward with their results). When people say "does a bank work in EVE?" we can show them the burned out husks of EBANK, DBANK, etc. When people say "does player run insurance work in EVE?" we can offer only theory.
I completely agree - as I said before I am not interested so much in trying to make money as just wanting to try something different as an experiment. I/we will definitely be posting progress as we go, regardless of how horrendously pear-shaped it all goes!
Cheers
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stoicfaux
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Posted - 2010.03.12 17:13:00 -
[45]
Originally by: Dzil I think the problem with this topic is that even though 90+% of the playerbase feels it's too vulnerable/a waste of time, we really have no practical evidence: no one's tried it (or at least, no one's come forward with their results). When people say "does a bank work in EVE?" we can show them the burned out husks of EBANK, DBANK, etc. When people say "does player run insurance work in EVE?" we can offer only theory.
This is less about theory and more about developing a Business Plan. Until someone can put together a business plan that shows how a T2 insurance company can make a profit when there's no practical way to control insurance fraud, the idea is dead in the water.
----- "Are you a sociopathic paranoid schizophrenic with accounting skills? We have the game for you! -- Eve, the game of Alts, Economics, Machiavelli, and PvP"
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.12 17:17:00 -
[46]
Originally by: Dzil When people say "does player run insurance work in EVE?" we can offer only theory.
True. I used to think that a player-run insurance plan, with sufficient safeguards in the policy and sufficient knowledge of the risks involved, could succeed.
I also believed that a micro-loan plan with little/no collateral could work as well. Unfortunately, that was proven to be too optimistic, here.
I'm much more pessimistic these days.
The only way to make this work, is to make it inconvenient to use and unprofitable for the recipient. As Akita T eluding to, if you can make the insurance policy very unattractive to scammers, it will be unpopular with real customers. But you'll have a better chance of breaking even. -----------------------------------------------
- Who Dares, Wins
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.12 19:43:00 -
[47]
Example Post 1 -----------------------------------------------
- Who Dares, Wins
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.12 20:20:00 -
[48]
Edited by: Drab Cane on 12/03/2010 20:24:32 Example Policy, continued:
Details and Principles:
Each policy must be profitable in and of itself.
The accrued benefit should be no more than half of the policy premium.
The policy conditions and process requires that the insured must lose a ship, and must pay for the new ship before getting the replacement ship.
The only benefit that the insured gets from the policy is the convenience of not having to spend game time buying and transporting a new ship and fittings. Thus, the insurer is basically in the ship replacement business.
The accrued benefit and deductible should cover the replacement of the ship. The rest of the premium will hopefully cover the transportation costs. The transportation should be done via courier contract, with collateral covering the "market price" of the ship and fittings.
Possible enhancement:
If the insurer is able to turn a profit on their reserve funds, the insurer may allow the insured to earn interest on the accrued benefit.
Edit: finished posting example. -----------------------------------------------
- Who Dares, Wins
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Xeoniya
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Posted - 2010.03.12 20:38:00 -
[49]
Would this be a secondary gap insurance to cover the difference of what in game insurance covers or full coverage?
I think starting with a partial gap coverage (for example 70%-80% of the difference of in game insurance and full market value) might be a better route to start with: you want the insurer to have to pay a "copay" to avoid people being able to use your insurance for insurance fraud.
It may even make sense to start with a much lower % of 10-20% of gap to develop a baseline actuarial table for system/system sec and ship. This would offer a small amount of protection but might still be useful to some haulers.
Also I am curious if maritime insurance of the 1500-1600's might serve as a model - hard to verify claims, numerous pirates/privateers, plenty of salvage scams for insurance collection, etc.
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Joe Censored
Unknown-Entity Black Star Alliance
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Posted - 2010.03.13 00:40:00 -
[50]
The only way I could actually see this working is by not using a system like how the CCP insurance works, you'd need to do it more like a real life insurance company where you base cost on the driver's history, age, what they drive, etc.
For example, you could give good rates to to players who infrequently die or fly ships that are less likely to get destroyed in a fight. Also charging more for players with poor kill to death ratios and favorable rates to players with excellent ratios and player history.
Pretty much all of that could be accomplished by using your full api and a script to make the price calculations.
Though when it is all said and done, I'm not sure if this is a worthwhile idea actually
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stoicfaux
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Posted - 2010.03.13 19:34:00 -
[51]
Originally by: Drab Cane Each policy must be profitable in and of itself.
How?
Quote: The accrued benefit should be no more than half of the policy premium.
The policy conditions and process requires that the insured must lose a ship, and must pay for the new ship before getting the replacement ship.
The only benefit that the insured gets from the policy is the convenience of not having to spend game time buying and transporting a new ship and fittings. Thus, the insurer is basically in the ship replacement business.
I'm not grokking this. How is that useful for an honest customer? If I lose my ship, I still have pay enough in premiums to buy a new ship before it gets replaced?
Quote: The accrued benefit and deductible should cover the replacement of the ship. The rest of the premium will hopefully cover the transportation costs. The transportation should be done via courier contract, with collateral covering the "market price" of the ship and fittings.
Assuming that I'm misunderstanding something and that this actually is an insurance plan, then a fraudster will insure a ship with a billion in faction/deadspace fittings, let it get destroyed by NPCs, loot and salvage the wreck, and then file a claim. End result, the fraudster gets their ship back with 1 billion in fittings back plus an additional .5 billion in fittings looted from the wreck plus salvage for the cost of X premiums.
Can you please post an example with numbers?
----- "Are you a sociopathic paranoid schizophrenic with accounting skills? We have the game for you! -- Eve, the game of Alts, Economics, Machiavelli, and PvP"
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.13 22:15:00 -
[52]
Originally by: stoicfaux
Originally by: Drab Cane Each policy must be profitable in and of itself.
How?
Originally by: stoicfaux I'm not grokking this. How is that useful for an honest customer? If I lose my ship, I still have pay enough in premiums to buy a new ship before it gets replaced?
Nope, you understand perfectly. To get a replacement ship, the insured will have paid more out of pocket (between premiums and deductible) than the 'market price' of the ship he's getting. The insurer does not lose any money when a claim is made.
If the insured makes any money off the deal, it will be because he resold the replacement ship for more than he paid for it.
The honest insured customers won't have to shop around and pull together the replacement ship and fittings. They just have to wait for the replacement ship to be delivered. They'll be paying the premiums over time, so they don't have to mess with keeping aside ISK for replacing their ships (This works well for people who never keep ISK in their wallet).
So really, the two benefits are the easy ship replacement and the payment over time.
Originally by: stoicfaux Assuming that I'm misunderstanding something and that this actually is an insurance plan, then a fraudster will insure a ship with a billion in faction/deadspace fittings, let it get destroyed by NPCs, loot and salvage the wreck, and then file a claim. End result, the fraudster gets their ship back with 1 billion in fittings back plus an additional .5 billion in fittings looted from the wreck plus salvage for the cost of X premiums.
Alright, here's a quicky example. Bob buys a Raven for 75 million. He fits it with another 25 million in fittings, so he's flying a 100 million dollar ship.
Bob insures the ship with Mary's Ship Insurance. Mary comes up with a fair market price of 90 million. She quotes a monthly premium of 25 million per month. 18 million of that 25 million is the accrued benefit. Bob asks Mary to drop the replacement ship at his home station (20 jumps from Jita) should he ever need the replacement.
Three months go by, and Bob has paid 75 million in premiums. Bob decides he's done with Ravens, and he going to do something completely different (mining, or hauling, or something). So he completely unfits his raven, and sells off the 25 million he has in fittings. Then he flies the raven out to a Level 2 mission and has it blown up. He uses an alt to go out and salvage the wreck of the Raven, and sells the salvage for another 10 million.
Now he files the insurance claim. He has three months of accrued benefits (3 * 18 million = 54 million). Mary checks what the 'market price' is for the replacement ship and fittings, and comes up with 95 million replacement cost. Bob has to come up the difference between the replacement cost (95 million - 54 million = 41 million) which he does.
Mary buys the ship and fittings as cheap as she can, quickly, and manages to buy and fit the ship in a couple of days for 88 million. She hires a courier to haul the ship to its location, paying 9 million to do so. Bob gets his replacement ship 6 days after the first ship is blown up. In the meantime he's started his new career. Once he gets the ship, he sells it for 100 million (fittings and all).
So, what's happened?
Bob originally paid 100 million for his first ship, and recouped 35 million. He's paid 75 million in premiums plus 41 million in deductible (116 million) to get the replacement ship, which he cashes out for 100 million. He is out (-100 + 35 - 116 + 100) 81 million ISK.
Mary received 116 million in premiums and deductibles, paid out 88 million for the replacement ship and 9 million in hauling fees. She made (116 - 88 - 9) 19 million.
Thus the insurance policy is not one that shares risk across several people, but instead makes it easier for a pilot to replace a ship.
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- Who Dares, Wins
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.13 22:25:00 -
[53]
A couple of ideas on how the insurer could make the policy more attractive:
1) Reduce the portion of the premium above the 'accrued benefit' portion of the premium, so the the 'accrued benefit' portion is 75-80% of the total premium.
2) Let interest accrue on the 'accrued benefit'.
The insurer would need to be making good profits off the accumulated premiums to make the above options viable. -----------------------------------------------
- Who Dares, Wins
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wakalaka
Information And Entropy
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Posted - 2010.03.13 23:01:00 -
[54]
Insurance in a war zone as EvE is, comes to my mind as something a bit naive.
If Alice gets her car smashed by Bob, Bob's insurance company will cover the payment to Alice's. Supposing that Alice and/or Bob are insured and the accident is covered by insurance terms. For this to work you need lots of civil and *penal* laws. Even with insurance, and specially without, if there is the slightest doubt or disagreement you're going to court, where indemnification will be set.
In the case of ships IRL it's a bit different. You may want to take a look to the Code de Commerce of your country and other related international laws (that come from Napoleonic era) on shipowner, ship chartering, how insurance cases are solved (the car example above is a joke in comparison). But the point is the set of rules and conducts you'll have to follow.
Now, if you don't want this to be Yet Another Insurance Scam (YAIS) where you get you initial payments and then disappear, you should clarify what your rules are, at least for the amusement of the souls present here. Because what I'm reading is that you're covering all ****, and bro for this we just need Dr. Enjoy to change some numbers in SiSi, m8.
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stoicfaux
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Posted - 2010.03.14 18:22:00 -
[55]
Originally by: Drab Cane
The honest insured customers won't have to shop around and pull together the replacement ship and fittings. They just have to wait for the replacement ship to be delivered. They'll be paying the premiums over time, so they don't have to mess with keeping aside ISK for replacing their ships (This works well for people who never keep ISK in their wallet).
Methinks, this would be successful if you bought advertising time on Glenn Beck's show.
----- "Are you a sociopathic paranoid schizophrenic with accounting skills? We have the game for you! -- Eve, the game of Alts, Economics, Machiavelli, and PvP"
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Drab Cane
Carbenadium Industries
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Posted - 2010.03.14 22:05:00 -
[56]
Actually, I expect only a few people would buy the above policy, but at least the insurer wouldn't lose money in the process.
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- Who Dares, Wins
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