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blankseplocked Don't quite understand insurance
 
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Atalia AIkawa
Posted - 2011.06.20 21:11:00 - [1]
 

So I buy a ship and plan to insure it.

The insurance cost about 1/3 of the ship cost, but the payout is less than the ship cost.

The cost of the ship is cheaper than the estimated payout minus insurance cost.

Why don't I just buy a new ship if it blows up? Seems cheaper.

Tau Cabalander
Posted - 2011.06.20 21:18:00 - [2]
 

For 30% of the estimated value, you get 70% of the ISK back with platinum insurance.

I only insure tech 1 PvP ships.

Louis deGuerre
Gallente
Malevolence.
Posted - 2011.06.20 21:20:00 - [3]
 

Edited by: Louis deGuerre on 20/06/2011 21:20:02
If (platinum insurance payout - platinum insurance cost) < new ship cost => no point to insure ship.

However, this is usually not the case for T1 ships.

Atalia AIkawa
Posted - 2011.06.20 21:28:00 - [4]
 

Originally by: Louis deGuerre
Edited by: Louis deGuerre on 20/06/2011 21:20:02
If (platinum insurance payout - platinum insurance cost) < new ship cost => no point to insure ship.

However, this is usually not the case for T1 ships.

Hmm I guess it depends on the ship. I had a pretty good deal on my ship, and it is a lot cheaper than the payout.

Thanks all.

Matalino
Posted - 2011.06.20 22:42:00 - [5]
 

Edited by: Matalino on 20/06/2011 22:45:56
Originally by: Louis deGuerre
If (platinum insurance payout - platinum insurance cost) < new ship cost => no point to insure ship.

However, this is usually not the case for T1 ships.
They changed to a dynamic insurance system specifically to ensure that "platinum insurance payout - platinum insurance cost < new ship cost" for all types of ships. Therefore, following that suggestion would mean that one should never insure any ship.

A more effective approach to insurance is: first, assess how likely you are to lose the ship during the next three months, and second assess how much effort it will take to purchase insurance.

If the chance of losing your ship during the next three months is less than 50%, then do not buy insurance. If the chance of losing your ship during the next three month is greater than 50%, the do buy insurance. Regardless of how the value of insurance compares with the value of the ship, you will increase your insurance pay out by twice what you pay for insurance. Thus, buying insurance is effectively betting against yourself with even odds.

The other factor to consider is the effort taken to insure your ship. If you are in deep null sec, then it might not be worth the effort of flying to a station where you can purchase insurance. Even if you are in a station that offers insurance, if the insurance amount is small enough, you might not feel that it is worth the effort to click those few buttons to buy insurance. This is a purely personal preference in weighting the effort needed to buy insurance against the value of that insurance.

These two principles form a sound basis for deciding to purchase insurance for any ship class regardless of the value of the insurance relative to the value of the ship and fittings.

Tuggboat
Minmatar
Posted - 2011.06.21 01:21:00 - [6]
 

Yuu lose less money if you insure, t1 pvp ships are worth insuring. But even in pve misions, in the very beginning, until your skills are more solid, frigates and cruisers will go down. When you first get into battlecruisers, until you get a t2 tank, your bc's will go down. Early in the game isk is a lot harder to come by. Fittings aren't free or insured though. If you die, at least bookmark before you cancel the mission and get back about half of your fittings too.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2011.06.21 01:29:00 - [7]
 

Edited by: Akita T on 21/06/2011 01:31:05
_

How much the ship has cost you initially is irrelevant.

Basic (no-cost, default) insurance pays out 40% of "base price".
Various other insurance levels cost more up front and pay out more.
Platinum insurance costs 30% of base price, and pays out 100% of base price, for a grand total "ISK returned" of 70% of base price.

If your ship survives the first platinum insurance period unharmed and you insure it again, the total cost so far would be 60% for a 100% payout and therefore 40% net return, identical to NOT having insured it at all.
Only ever get insurance if you suspect your ship will blow up in the near future (high probability for it to happen, that is), and always get platinum insurance when you get any insurance at all.

For non-T1 ships, the difference between 40% (free, "basic" insurance) and 70% (platinum actual return) of the base price can be tiny when compared to actual market price of the ship.
However, make no mistake, that does not change ANYTHING.
If the ship blows up, you end up with more ISK if you insured it, regardless of how much you paid for the ship's initial purchase.

ALWAYS insure ships you're fairly certain to lose before the insurance period expires, regardless of what ship it is.
If you think there's a decent chance it won't blow up (for instance, if you're a highsec dweller, seldom losing ships at all) then NEVER insure the ship.

Velicitia
Gallente
Open Designs
Posted - 2011.06.21 14:03:00 - [8]
 

Originally by: Akita T
ALWAYS insure ships you're fairly certain to lose before the insurance period expires, regardless of what ship it is.


Unless they've changed T2 insurance payouts... this only applies for T1 hulls.
Note that I haven't looked at T2 hulls in months...

Akita T
Caldari Navy Volunteer Task Force
Posted - 2011.06.21 14:15:00 - [9]
 

Originally by: Velicitia
Originally by: Akita T
ALWAYS insure ships you're fairly certain to lose before the insurance period expires, regardless of what ship it is.

Unless they've changed T2 insurance payouts... this only applies for T1 hulls.
Note that I haven't looked at T2 hulls in months...


Hypothetical example.
Let's say there's a T2 ship that costs 628 mil on the market, and the platinum payout is 100 mil.
If you don't insure it, you get 40 mil when it blows up.
If you pay 30 mil to insure it, you get 100 mil back, for 70 mil actually returned.
You get 30 mil ISK extra if it was insured.
The fact that the market price was 628 mil was completely and utterly irrelevant.

Matalino
Posted - 2011.06.21 15:05:00 - [10]
 

Originally by: Akita T
Hypothetical example.
Let's say there's a T2 ship that costs 628 mil on the market, and the platinum payout is 100 mil.
If you don't insure it, you get 40 mil when it blows up.
If you pay 30 mil to insure it, you get 100 mil back, for 70 mil actually returned.
You get 30 mil ISK extra if it was insured.
The fact that the market price was 628 mil was completely and utterly irrelevant.

This!

If your ship is destroyed during the term of the insurance, you double whatever you paid for insurance. If you pay 30 mil, you will get your 30 mil back along with an extra 30 mil above what you would get without buying insurance.

It will not be profitable to self-destruct to collect insurance, but that is not the point. The point is that it does not matter how much of the purchase price of the ship is covered. If you are going to lose the ship anyways, you will be better off purchasing insurance than not.

Velicitia
Gallente
Open Designs
Posted - 2011.06.21 17:14:00 - [11]
 

ohhh, gotcha Akita...

still thinking along the lines of the old insurance system where the payout on platinum covered near everything (inc. modules) for T1, and was laughably small for T2...


 

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