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The technical term is that you must have an “insurable interest” in what you insure. Both of your examples are people protecting their insurable interest. Ownership is the most common insurable interest, but there are many other ways to have one.

This is done because the insurance company wants you to prefer that the covered event doesn’t happen, which avoids some conflicts of interest.

These prediction market events don’t have the usual insurance interests involved.

by chollida13 hours ago|

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> The technical term is that you must have an “insurable interest” in what you insure.

Yep, we're in full agreement here

by sandworm1012 hours ago|

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Unless you short the property. Essentially, sell it now on the bet that it will drop in value later. Then it burns down and you repurchase the vacant lot and return the property to the original owner.

Evil, but most everything in real estate is evil.

by emsign2 hours ago|

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And that's exactly the problem with Polymarket and such, it gives an incentive to be destructive because that's easy. Entropy is easy.

With an insurance this trick won't work, because the insurance company will notice what you are doing. Polymarket doesn't care.

by WinstonSmith842 hours ago|

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> With an insurance this trick won't work, because the insurance company will notice what you are doing

This has worked well millions of times (and occasionally failed too with people ending in prison or with huge fines). Where I can agree however is that Polymarket makes that much easier.

by mschild3 hours ago|

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To perhaps be a bit more pendantic.

You're not allowed to take out life insurance on someone you don't know or have a relationship (business or otherwise) with.

Life insurance on a business partner works. Life insurance on your spouse as well.

Life insurance on the leader of a random country? Unlikely

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by hmry3 hours ago|