<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>taneq</author><text>This sounds like a great system on face value, but it also adds a perverse incentive for insurers to drive &lt;i&gt;up&lt;/i&gt; repair costs (and hence their premiums) in order to increase their own revenue. I&amp;#x27;ve heard this effect put forward as one reason that the U.S. medical system&amp;#x27;s prices are so overinflated.</text><parent_chain><item><author>surge</author><text>It&amp;#x27;s worth mentioning some states have caps on how much insurance can make, in other words if they&amp;#x27;re not absorbing a base amount of risk, they have to give the money back because people are paying too much to insure against something where the risk is low. I&amp;#x27;ve gotten checks back from auto insurance before where they made too much money that year due to lack of payouts.</text></item></parent_chain></comment><story><title>Some auto insurers are sending refunds to customers as crash rate falls</title><url>https://www.npr.org/sections/coronavirus-live-updates/2020/04/06/828187071/some-auto-insurers-are-sending-refunds-to-customers-as-crash-rate-falls</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>briandear</author><text>There is more nuance. It’s actually because an insurance company is required to pay a certain percentage of premiums out for claims. In health insurance, there is the “80&amp;#x2F;20” rule where at least 80% of premiums are required to be paid as claims. Auto&amp;#x2F;property has similar rules set by relevant state insurance commissions.&lt;p&gt;If claim volume drops, they means they don’t get to necessarily keep the extra “profit.” I am not familiar with the rules around auto (I used to be a disaster home&amp;#x2F;property claims adjuster,) but I suspect auto rules are similar. It isn’t about risk being reduced, but more about claims payouts being projected less than the premium rates have accounted for. Insurance companies actually want lower rates — it means they sell more insurance which further deepens the risk pool.</text><parent_chain><item><author>surge</author><text>It&amp;#x27;s worth mentioning some states have caps on how much insurance can make, in other words if they&amp;#x27;re not absorbing a base amount of risk, they have to give the money back because people are paying too much to insure against something where the risk is low. I&amp;#x27;ve gotten checks back from auto insurance before where they made too much money that year due to lack of payouts.</text></item></parent_chain></comment><story><title>Some auto insurers are sending refunds to customers as crash rate falls</title><url>https://www.npr.org/sections/coronavirus-live-updates/2020/04/06/828187071/some-auto-insurers-are-sending-refunds-to-customers-as-crash-rate-falls</url></story>