Saturday, April 21, 2012

the falacy of insurance

Insurance seems like a good thing under a shallow inspection. One makes small payments over time, to receive a potentially large payment in time of need. Self insuring is close to ideal. The self insured company or individual puts money aside in case they have a car wreck, health problem, or fire. There is freedom to use this single fund for any emergency, and coverage does not cease with a missed payment. Of course, one does have to put the money aside.

Commercial insurance falls short of idealized self insurance in several ways. The most obvious shortfall is the overhead. Salaries for insurance workers and company profits must come right out of the emergency fund. In the big picture, the insured support a vast community of parasitic workers who do not fix cars or staff hospitals or rebuild houses. Some of these are paid to fight insurance fraud, which does not exist among the self insured. Others are paid to reduce or deny valid payments. The industry is arranged so the house always wins. So, buying insurance instead of putting money aside is like "investing" in lottery tickets or Las Vegas gambling.

Fraud is built into insurance. Insured car repairs and medical procedures cost far more than cash transactions. In many cases, the 'deductible' amount paid by the 'insured' is similar to the cash price for the service. I am not too sure how the 'coverage' helps. Insurance companies are very good at delaying and reducing payments to providers, forcing them to wildly inflate prices.

Behavior is affected on both sides of the service industry. The insured, having given up part of their responsibility, are less careful. They drive more recklessly, build homes that are likely to be destroyed, and take health risks. Once the damage is done, the insured rebuild their home in the same flood plane, get all kinds of expensive and incorrect medical procedures, and make other foolish choices that they would not make 'with their own money. Insurance fraud is more accepted in our culture than child molestation or murder, so the less scrupulous burn down their own house, give away items that are reported stolen, or cause traffic accidents to defraud insurance companies. This erosion of integrity and responsibility wastes money and weakens us as people.

Insurance companies limit the behaviors of individuals and companies. These limits are rarely good. Absurd medical procedures are done, activities and business ventures are forbidden, and small business is stopped or impeded. In the case of mandatory insurance, statisticians are given the effective ability to pass laws. These defacto laws are meant to maximize profit, and often degrade our lives. When a type of insurance is ruled as mandatory, a vast edifice of un-needed overhead and fraud is built. Freedom and choice are further limited, and more of our wealth is traded for a [partly] false sense of security.

As dwindling resources meet population increase, we arrive at the season of re-evaluation. Inefficient structures, including wasteful governments and predatory corporations can be replaced with more efficient entities. Gambling with ones health, safety and life via commercial insurance are likely to be revealed as wasteful and senseless. It is amazing that many different types of insurance are not already classed as deceitful financial products. It is as if we 'Modern' home Sapiens despise doing real work. We prefer to press buttons and fatten like food animals in sterile 'offices', while selling each other worthless documents that promise 'security' and 'safety'.

Real safety is found by accepting risk and responsibility. Rather than paying out almost all of ones income to banking shysters with their loans, insurances and false promises, the responsible person might live entirely within their means, and put aside a reasonable fund for emergencies. All this must be pretty amusing to the folks who know me. What could a destitute hermit know about economics or responsibility? Well, sometimes a system can be studied more objectively from the outside.

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I am a fine art photographer and filmmaker. Lately, I have been doing panoramic images of the Canyonlands area, and printing them using archival materials. These large images are placed in work cubicles and homes, and can sometimes briefly transport the viewer to a contemplative location.