Speculation: How DOES the insurance...
- Thread starter dc83
- Start date
Most of the purchase price of a ship is insurance overhead.
You should have read your contract more carefully, you were only paying attention to how it works when your ship is destroyed.
You see, if you die outside of your ship, then they come and take your ship to one of their shops. They strip it down, install E-class modules, and re-sell the hull. Then they sell the modules separately, and that's how they make most of their money, they get insane prices for engineered modules. There are rumors that the population of pilots versus ships is carefully managed to make sure that the insurance company comes out ahead. If your ship type is in demand and you have some nicely engineered modules, then you might have an "accident" at the station bar.
This is why our pilots refuse to get out of their seats, it's just safer to just stay put
You see, if you die outside of your ship, then they come and take your ship to one of their shops. They strip it down, install E-class modules, and re-sell the hull. Then they sell the modules separately, and that's how they make most of their money, they get insane prices for engineered modules. There are rumors that the population of pilots versus ships is carefully managed to make sure that the insurance company comes out ahead. If your ship type is in demand and you have some nicely engineered modules, then you might have an "accident" at the station bar.
This is why our pilots refuse to get out of their seats, it's just safer to just stay put
Because insurance isn't a zero-sum game. A percentage of an insured customer base will either never claim, or claim less than their total premium. So such insurance companies tend to be pretty profitable as their premiums reflect risk (which is why they tend to be pretty high). But then, we don't have insurance, per-se, we have the space equivalent of Maritime Underwriting. Just massively simplified. https://en.wikipedia.org/wiki/Marine_insurance
Effectively, the rebuy is the excess, and covers the period between last docking at a facility (be it base, station or outpost) and the point of (total) loss. It's not a stretch to think in such a universe, salvage would happen for derelicts. Never mind ship prices may include basic indemnity on the hull and modules.
It's not that hard to come up with some basic simulacra for the sorts of insurance we have now, to explain it. Also? It's a game.
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I choose to believe that they take a small cut from the repair/refuel/rearm costs as well. Especially when a Torpedo is apparently worth the same as an Eagle Mk II
Taxation. For any money transaction related to cargo or mission etc there is a tax paid by the client. You don't see it as it is hidden from you and it is quite hefty. They make enourmous amounts of money with this and have credits to fund your ships as well as stations etc. It is their best interest to keep the fleet flying so paying the insurance is nothing to them. Compared to their gains the insurances they pay is peanuts.
Black markets however do not pay these taxes naturally. That's why they pay quite well for security forces to keep smugglers out. You get the insurance even if you were destroyed while doing illegal activities, as they know they will anyway get their money back many times over.
Black markets however do not pay these taxes naturally. That's why they pay quite well for security forces to keep smugglers out. You get the insurance even if you were destroyed while doing illegal activities, as they know they will anyway get their money back many times over.
I would imagine the pilots Federation takes a cut of all profit made by a Cmdr
If the Pilots Federation is behind the Standardised HUD and lfight controls we see on all ships they probably get a cut there too
they also would get the ships at a small mark up compared to us
rememebr when the FDL was over 100 million credits and the vulture 21 million?
The reduction in price was a reduction in sales tax, so begs the question what is the actual mark up on the ships and modules we buy?
Is the excess we pay the actual cost of the ship (or close to it) and the Pilots federation Insurance pays the difference between cost plus wholesale, then they make a mint of the % cut they get from all members profits
I mean if the E rated Sidewinder costs 31000, so insurance is 1550, but if we lood at the commodites of that 25 tons ship, it minght not cost much more than double that in components and time in a auto fabricator, if we tallied them up off the commodities market, so if the Pilots federation is merely taking 1% of your profit, wont take long for a humble Sidewinder pilot to be earning the Pilots federation profit against any loss after the excess
If the Pilots Federation is behind the Standardised HUD and lfight controls we see on all ships they probably get a cut there too
they also would get the ships at a small mark up compared to us
rememebr when the FDL was over 100 million credits and the vulture 21 million?
The reduction in price was a reduction in sales tax, so begs the question what is the actual mark up on the ships and modules we buy?
Is the excess we pay the actual cost of the ship (or close to it) and the Pilots federation Insurance pays the difference between cost plus wholesale, then they make a mint of the % cut they get from all members profits
I mean if the E rated Sidewinder costs 31000, so insurance is 1550, but if we lood at the commodites of that 25 tons ship, it minght not cost much more than double that in components and time in a auto fabricator, if we tallied them up off the commodities market, so if the Pilots federation is merely taking 1% of your profit, wont take long for a humble Sidewinder pilot to be earning the Pilots federation profit against any loss after the excess
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It's a game.
Think Kofeyh nailed it with one simple, sharp, short retort.
It's a game.
Things happen in games. Things that make unbelievably zero sense, along with hundreds of unbelievably dense other things.
BUT at the end of the day, it's a game. Not overly sure I'd fancy a 25,000,000 credit bill per month for insuring an A-rate Cutter...
Nah, ship repairs are pretty cheap relatively speaking.
You don't think your stored ships are actually in storage do you Always check your ships for scorch marks when they come back from 'storage'
Always check your ships for scorch marks when they come back from 'storage'
Because you already pay for it when you buy your ship. You Anaconda doesn't cost 150.000.000 but 50.000.00 and 100.000.000 go directly to the insurance company.
I've often wondered about this, and arrived at the conclusion they must tax every transaction, in a similar manner to how credit card companies levy a surcharge on businesses, or paypal does.
I was told once upon a time that Pilot Federation is playing the insurance fee.
But I don't get it how they pay it from what type of income because Pilots are not charged
for their memebership.
Seems like they are having some money laundring service for some NPCs.
Regards,
Miklos
But I don't get it how they pay it from what type of income because Pilots are not charged
for their memebership.
Seems like they are having some money laundring service for some NPCs.
Regards,
Miklos
Clearly the Pilots Federation is funded by the investment of endowments from wealthy commanders, who often bequeath vast sums to the organisation upon their death.
Careful management of these funds enables the club to nurture new generations of commanders who will eventually become new donors.
(Obviously the fastest way to get your descendants blackballed from the Pilots Federation is to not make what is felt to be sufficiently respectful consideration for the organisation in your will.)
Careful management of these funds enables the club to nurture new generations of commanders who will eventually become new donors.
(Obviously the fastest way to get your descendants blackballed from the Pilots Federation is to not make what is felt to be sufficiently respectful consideration for the organisation in your will.)
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Here's my theory:
The Pilots Federation regulates the mission boards on stations and charges fees for posting missions. After someone becomes a pilot, they pay the signing fee to join the Pilots Federation and get their first sidewinder after passing the tests. As a deal, ship manufacturers offer replacement ships for certain models at a discounted rate to the Pilots Federation. This way, the Pilots Federation is able to make money for its insurance, the manufacturers are able to sell their newest ships, and pilots don't take a huge loss on ship destruction.
It also explains why some ships from Classic Elite aren't in the game: They aren't covered in the insurance agreement between the Pilots Federation and the manufacturers.
The Pilots Federation regulates the mission boards on stations and charges fees for posting missions. After someone becomes a pilot, they pay the signing fee to join the Pilots Federation and get their first sidewinder after passing the tests. As a deal, ship manufacturers offer replacement ships for certain models at a discounted rate to the Pilots Federation. This way, the Pilots Federation is able to make money for its insurance, the manufacturers are able to sell their newest ships, and pilots don't take a huge loss on ship destruction.
It also explains why some ships from Classic Elite aren't in the game: They aren't covered in the insurance agreement between the Pilots Federation and the manufacturers.
Here's how I think it went.
The Universal Financial Corporation won a back-off among all the major insurance carriers to provide property total loss stellar ship insurance to all pilots who are members of the Pilots Federation. The Pilots Federation, in exchange, pays an amount per member of the Pilots Federation, which they pay for by taking a cut of every piece of cartographics data and every bounty handed in by every Pilots Federation pilot. The contract is good for thirty years.
At first, everything went fine; the Universal Financial Corporation (UFC) made hefty profits, as most pilots, in the circumstance where there ship was destroyed, were inevitably killed themselves, and therefore unable to collect on the insurance. For the first few years, everything well for UFC; the underwriters were happy, everyone was happy.
What UFC didn't anticipate was rapid progress in Remlok and escape pod technology. By 3301, Pilots had a near certainty that they would survive even a total loss of ship, leading to a far greater number of claims tham UFC ever anticipated. UFC was forced to honor their contract, even as it dragged down the profits off the whole corporation.
Compounding the problems for UFC were the costs of compliance; insurance is regulated at the system level, driving up mind-numbing costs in the realm of billions of credits just to manage the compliance staff to process claims. Other services were offered to Pilots Federation Pilots, included generous loans at low interest rates, to try to balance the losses, but those have proven to not fully correct the problem.
The open question then is how long before UFC itself goes bankrupt, and what will happen after insurance rates have to be purchased on the open market, given Pilots Federation members proclivity for risky behavior?
The Universal Financial Corporation won a back-off among all the major insurance carriers to provide property total loss stellar ship insurance to all pilots who are members of the Pilots Federation. The Pilots Federation, in exchange, pays an amount per member of the Pilots Federation, which they pay for by taking a cut of every piece of cartographics data and every bounty handed in by every Pilots Federation pilot. The contract is good for thirty years.
At first, everything went fine; the Universal Financial Corporation (UFC) made hefty profits, as most pilots, in the circumstance where there ship was destroyed, were inevitably killed themselves, and therefore unable to collect on the insurance. For the first few years, everything well for UFC; the underwriters were happy, everyone was happy.
What UFC didn't anticipate was rapid progress in Remlok and escape pod technology. By 3301, Pilots had a near certainty that they would survive even a total loss of ship, leading to a far greater number of claims tham UFC ever anticipated. UFC was forced to honor their contract, even as it dragged down the profits off the whole corporation.
Compounding the problems for UFC were the costs of compliance; insurance is regulated at the system level, driving up mind-numbing costs in the realm of billions of credits just to manage the compliance staff to process claims. Other services were offered to Pilots Federation Pilots, included generous loans at low interest rates, to try to balance the losses, but those have proven to not fully correct the problem.
The open question then is how long before UFC itself goes bankrupt, and what will happen after insurance rates have to be purchased on the open market, given Pilots Federation members proclivity for risky behavior?