Hurricane Season 2004--please read

In article ,
wrote:

But the underlying priciple remains -- don't insure for a loss you
can affort so sustain.
People can pretend that this decision is being made by some objective
measurement like afford to sustain. Buying insurance, like anything else, is
essentially a personal decision based on whether or not a person feels like
they are getting sufficient value for the cost. I don't like to feel like I
have wasted money and I certainly don't want to lose out on a vacation because
of some reason that is covered (the twice I have had to use it for vacations
that I was only able to go on later because I got my money back from the
insurance).


--
"No"
Amy Carter when asked if she had a message for
the children of America.

In article . net,
"Skip Elliott Bowman" writes:

With all due respect, Charlie, I think the point is being missed. For
example, look at auto insurance. We're required by law to carry a minimum
coverage: liability. ...

Well it wouldn't be the first point I've missed. smile

However, your auto insurance analogy is faulty.

First, what we are required by law to carry -- liablity coverage --
is NOT for our protection, but for the protection of others who we
might injure.

If your auto is financed, you are probably required by your loan
agreement to carry theft and collision insurace -- again, not for
your protection, for the lender's.

Second, it is much less likely that you will be able to sustain the
type of loss that is likley in a serious auto accident -- which can
run to many tens or even hudrends of thousands of dollars.

But the underlying priciple remains -- don't insure for a loss you
can affort so sustain. In terms of auto insurance, this means get
the largest reasonable deductable available. My deductible is $1000.
(I have found that larger deductibles do not yield significant reductions
in premium.)

As for losses I can't afford -- well, my wife and I carry a fairly
large "umbrella" liablity policy, beyond our auto and homeowners policies.

--
Charlie Hammond -- Hewlett-Packard Company -- Ft Lauderdale FL USA
-- remove "@not" when replying)
All opinions expressed are my own and not necessarily my employer's.

"Charlie Hammond" wrote in message
...
In article ,
"Jess Englewood" writes:

"Rosalie B." wrote
..
The PRUDENT thing to do if you take a vacation during the hurricane
season is NOT to insure the vacation but to not spend any more than
you can afford to lose, and to have alternate plans.

Grandma Rosalie said that -- not me (Charlie Hammond) as your posting
seemed to indicate. No big deal -- I agree with the statement.

..
But in the end it is a personal decision. Whether or not anyone wants, or
does not want, to spend a few hundred bucks to possibly protect a few
thousand is not a matter of thriftiness or sensibility. But a matter of
personal comfort level with the expenditure.

I agree that it is a personal decision, related to personal comfort level.
However, over several years you will be spending a few thousand dollars,
not just a few hundered.

Doesn't matter what a person is spending, it matters why they are spending
it. And if a few hundred for one trip, or a few thousand over several years
of trips makes sense to *them*, then that, rather than what somebody else
with a different perspective tells you to do, is "PRUDENT".

Remember way back when, before we all realized we were not as smart as we
thought, and we used to say "it's all relative" in answer to almost every
quandary. Well, in some sense we were right.

And your only protecting agains some limited
situations -- you vacation dollars are still at sustantial ris for
uncovered situations.

There are differing levels of coverage, with of course differing levels of
expense. You have said that you don't buy trip insurance so I suspect you
may not be as familiar with it's many current iterations as someone who
does. There are some extraordinary policies out there. There are some real
crap policies as well.

And in my experience the amount your protecting --
the amount that wouldn't be refunded in any case -- is in the hundreds.

You are understating the case significantly. Acceptable reasons for loss are
pretty expansive and you only cover whatever expense you choose. It is
practically the very simplest insurance written, other than the jewelry
rider on your homeowners policy. I don't buy it often, but there are trips
in which I would be a fool not to. I generally buy it for any Pacific Rim or
Africa trip I take. The cases of trip interruption alone have made me more
than whole on every single dime I have spent on travel insurance.

"Jess Englewood" wrote in message ...
"Rosalie B." wrote in message
...
(Charlie Hammond) wrote:

The PRUDENT thing to do if you take a vacation during the hurricane
season is NOT to insure the vacation but to not spend any more than
you can afford to lose, and to have alternate plans.

One *could* say, since you are basing your statement on affordable loss,
that if a person can afford the insurance, regardless of whether or not it
is ultimately invoked, it is "PRUDENT" to protect your costs. What is
affordable to any single individual doesn't necessarily stop with the
vacation cost.

Don't mean to jump in to muddy the water here. All three of you
(Grandma, cited as Charlie), Charlie, and Jess are saying SENSIBLE
things (without any use of technical terms that make those ideas
precise), which CAN be defined, quantified, and discussed in a
completely rational manner to reflect the same ideas.

But many of these ideas, presented in these newsgroup forums, are
unfortunately muddled by the use of terms such as "PRUDENT", which
is an undefined QUANTITATIVE term in any discussion of risk or
insurance analysis.

It would be helpful, for everyone to take a look at some of the
"technical concepts" (buy a book, or borrow one from the library)
and "standard terms" that facilitate the understanding, as well as
the discussion of the "insurance" and "risk analysis" topics.


But in the end it is a personal decision.

That we ALL agree. But how does one THINK about the problem, or set
up the analysis for oneself, to help understand his OWN decision
behavior/mechanism better?

Let me just insert a few technical terms (standard ones) that
discuss and QUANTIFY these nebulous and ill-defined discussions
here.


Whether or not anyone wants, or does not want, to spend a few hundred
bucks to possibly protect a few thousand

These can be well quantified and understood under such terms as
the "utility (function)" of money, the "expected loss" or "risk" in
any insurance proposition (on both the side of the insurer and the
insured), in monetary terms, and a few other related statistical
issues ... at the end what's "prudent" for ANYONE would be to
choose the action that minimizes that person's EXPECTED LOSS (with
the "utility" of money, risk aversion or risk preference all
factored into the decision analysis)!


The utility of momey is a very important concept raised by these
discussants. It's how one VALUES his/her own money (dollars). It's
a NONLINEAR function (to be illustrated) for everyone, and
different for everyone -- which explains (to a large extent) how
WILLING each person is (or unwilling) to engage in ANY gamble.


Take this very simple example: EVEN bet.

1. Flip a coin. Heads, you win $1; Tails, you lose $1.

For those who are willing to take this EVEN bet (50/50 chance
of winning or losing $1), how many would be willing to take THIS:


2. Flip a coin. Heads, you win $1000; Tails, you lose $1,000.

Let's play on, :-) You'll begin to get some idea about what
you can "afford" to lose, your risk aversion, risk preference, and
your OWN utility of money!! Just VARY the amount, and you'll
see where your own utility of money "function" breaks down from
being "linear" (willing to make the same bets so long as the odds
remain the same).

3. Flip a coin. Heads you win $1 MILLION; Tails, you lose $1
Million.

Even assuming those who "can afford" to lose $1 million, somewhere
along this "utility function of money", LINEARITY breaks down --
that is, you most likely will be UNWILLING to make an even bet.
You most likely will be unwilling to make a bet that is FAVORABLE
to you: $1 million of yours against $2 millions of Bill Gates.

Get the idea?

All of these concepts of utility of money, gambling risks, and how
you VIEW the event of uncertainty can be quantitatively and
rationally set up and analyzed this way.


"It's not WIN or LOSE, but how you play the game that matters."

The line above, well-known in sports and sportsmanship is exactly
the way "to insure" or "not insure" CAN and SHOULD be viewed
rationally, by everyone.


is not a matter of thriftiness or sensibility. But a matter of
personal comfort level with the expenditure.

In the end, this nebulous idea can be well quantified -- differently
for different individuals, for EACH to make his/her decision on the
same GAMBLE (insurance) offered, and ALL may be "prudent" though they
make all have different cutoff points for "level of expenditure"
and "personal comfort" all subsumed under the proper setup of
utility functions and proper "risk analysis".


What CAN be said, is that it is not "prudent" to make any such
decision about "prudency" without understanding the underlying
rational basis for a "prudent" decision.


But in the end it is a personal decision.


Those who know HOW to think about the problem better are the ones
more likely to make the "more prudent" decision for himself/herself.

All Chicago/Wharton/MIT/Harvard/Stanford/etc. MBAs know these basic
concepts of risk analysis, utility of money, etc. The Chicago/MIT
students know how to QUANTIFY them better. :-) But they are all
EDUCATED about risk analysis and deserve the high salaries they
command.

You cannot expect to successful in business, or making business
decisions "prudently" without a proper understanding of the BASIS
under which such deccisions need be made.

Evaluating your own insurance needs AND how you view your own
insurance is just a microcosm of this decision process that applies
to ALL businesses, and ALL decisions involving "undercertainties"
and "risks".

End mini-lecture. Call it "rant" if you wish - the latter is the
word often used in newsgroups by those who don't understand the
concept/substance presented by others. :-)))

-- Bob.

Charlie,
Sorry, but it is all a bet. Look at the probabilities and the loss to
get the expected value or pay for insurance. And insurance companies
also invest your premium so they can lose all the premium and still show
a profit because of the investments. So I usually decline the
"insurance" at Best Buy because they want too much to insure my new toy
maybe $25 for something that costs $100. Now if they would insure it
for $5 I'd probably take the insurance.



Charlie Hammond wrote:
In article t,
"Skip Elliott Bowman" writes:


Hurricane season is June 1 through November 30, with most gales forming
mid-July through November. While this is no reason not to go or to cancel
existing plans, a prudent option would be to hedge your plans with
insurance.

[emphasis added]

THERE ARE SEVERAL DIFFERENT POLICIES AVAILABLE AND ALL ARE A LOT
CHEAPER THAN HAVING TO LOSE YOUR $$ OR YOUR VACATION.


I'm sorry to point out that this last is not correct.
Casualty insurance alwasy cost more than it pays out.
This is becasue it has to pay sales commissions and other business
expences in addition to what it pays out. Insurance companies make money.

Because of this, the general rule is NOT to insure any loss you can
afford to sustain. Well, if you can't afford the cost of your vacation,
then stay home.

Also keep in mind that you will probably NOT loose all of your vacation
money. Most resorts and airlines will (inspite of the original posters
statements) make a full or partial refund under most conditions --
certainly if a hurrican makes thier providing the contracted services
impossible.

My advice is to SAVE the money you would pay for trip insurance.
Every few years you'll have saved enough to treat yourself to a
better vacation -- maybe even a "free" one.

Now I think Bowman would make a good used car salesman, and he is a fair
insurance salesman. But neglects the bottom line in that the insurance
company is in the same business as a casino, with the sane bottom line,
make money.
As for Reef Fish, Bob you baffle them with bull ****, with a feudal
venture in to dazzling dumbness. You neglected to mention the odds
required in favor of the insurance companies before they will play the
game. But you could sell used cars too, not many returns though.
I would consider that I am a self insurer. That translates in to not
purchasing insurance while going on vacation. The Cruise ship industry
will provide insurance for about any thing, when it comes to collecting,
forget it. My experience was baggage damage, New suitcase destroyed,
they stated, that was not covered, in their insurance policy, that they
thought I might have. Beyond that I seen nothing that would cause me to
have an insurance requirement.
SPAM. Some here are with intentions to sell the insurance offered,
nothing else. BILL


Reef Fish wrote:

"Jess Englewood" wrote in message ...
"Rosalie B." wrote in message
...
(Charlie Hammond) wrote:

The PRUDENT thing to do if you take a vacation during the hurricane
season is NOT to insure the vacation but to not spend any more than
you can afford to lose, and to have alternate plans.

One *could* say, since you are basing your statement on affordable loss,
that if a person can afford the insurance, regardless of whether or not it
is ultimately invoked, it is "PRUDENT" to protect your costs. What is
affordable to any single individual doesn't necessarily stop with the
vacation cost.

Don't mean to jump in to muddy the water here. All three of you
(Grandma, cited as Charlie), Charlie, and Jess are saying SENSIBLE
things (without any use of technical terms that make those ideas
precise), which CAN be defined, quantified, and discussed in a
completely rational manner to reflect the same ideas.

But many of these ideas, presented in these newsgroup forums, are
unfortunately muddled by the use of terms such as "PRUDENT", which
is an undefined QUANTITATIVE term in any discussion of risk or
insurance analysis.

It would be helpful, for everyone to take a look at some of the
"technical concepts" (buy a book, or borrow one from the library)
and "standard terms" that facilitate the understanding, as well as
the discussion of the "insurance" and "risk analysis" topics.

But in the end it is a personal decision.

That we ALL agree. But how does one THINK about the problem, or set
up the analysis for oneself, to help understand his OWN decision
behavior/mechanism better?

Let me just insert a few technical terms (standard ones) that
discuss and QUANTIFY these nebulous and ill-defined discussions
here.

Whether or not anyone wants, or does not want, to spend a few hundred
bucks to possibly protect a few thousand

These can be well quantified and understood under such terms as
the "utility (function)" of money, the "expected loss" or "risk" in
any insurance proposition (on both the side of the insurer and the
insured), in monetary terms, and a few other related statistical
issues ... at the end what's "prudent" for ANYONE would be to
choose the action that minimizes that person's EXPECTED LOSS (with
the "utility" of money, risk aversion or risk preference all
factored into the decision analysis)!

The utility of momey is a very important concept raised by these
discussants. It's how one VALUES his/her own money (dollars). It's
a NONLINEAR function (to be illustrated) for everyone, and
different for everyone -- which explains (to a large extent) how
WILLING each person is (or unwilling) to engage in ANY gamble.

Take this very simple example: EVEN bet.

1. Flip a coin. Heads, you win $1; Tails, you lose $1.

For those who are willing to take this EVEN bet (50/50 chance
of winning or losing $1), how many would be willing to take THIS:

2. Flip a coin. Heads, you win $1000; Tails, you lose $1,000.

Let's play on, :-) You'll begin to get some idea about what
you can "afford" to lose, your risk aversion, risk preference, and
your OWN utility of money!! Just VARY the amount, and you'll
see where your own utility of money "function" breaks down from
being "linear" (willing to make the same bets so long as the odds
remain the same).

3. Flip a coin. Heads you win $1 MILLION; Tails, you lose $1
Million.

Even assuming those who "can afford" to lose $1 million, somewhere
along this "utility function of money", LINEARITY breaks down --
that is, you most likely will be UNWILLING to make an even bet.
You most likely will be unwilling to make a bet that is FAVORABLE
to you: $1 million of yours against $2 millions of Bill Gates.

Get the idea?

All of these concepts of utility of money, gambling risks, and how
you VIEW the event of uncertainty can be quantitatively and
rationally set up and analyzed this way.

"It's not WIN or LOSE, but how you play the game that matters."

The line above, well-known in sports and sportsmanship is exactly
the way "to insure" or "not insure" CAN and SHOULD be viewed
rationally, by everyone.

is not a matter of thriftiness or sensibility. But a matter of
personal comfort level with the expenditure.

In the end, this nebulous idea can be well quantified -- differently
for different individuals, for EACH to make his/her decision on the
same GAMBLE (insurance) offered, and ALL may be "prudent" though they
make all have different cutoff points for "level of expenditure"
and "personal comfort" all subsumed under the proper setup of
utility functions and proper "risk analysis".

What CAN be said, is that it is not "prudent" to make any such
decision about "prudency" without understanding the underlying
rational basis for a "prudent" decision.

But in the end it is a personal decision.

Those who know HOW to think about the problem better are the ones
more likely to make the "more prudent" decision for himself/herself.

All Chicago/Wharton/MIT/Harvard/Stanford/etc. MBAs know these basic
concepts of risk analysis, utility of money, etc. The Chicago/MIT
students know how to QUANTIFY them better. :-) But they are all
EDUCATED about risk analysis and deserve the high salaries they
command.

You cannot expect to successful in business, or making business
decisions "prudently" without a proper understanding of the BASIS
under which such deccisions need be made.

Evaluating your own insurance needs AND how you view your own
insurance is just a microcosm of this decision process that applies
to ALL businesses, and ALL decisions involving "undercertainties"
and "risks".

End mini-lecture. Call it "rant" if you wish - the latter is the
word often used in newsgroups by those who don't understand the
concept/substance presented by others. :-)))

-- Bob.

http://vortex.plymouth.edu/tropical.html
http://vortex.plymouth.edu/
These locations will keep you up to date, Bookmark them for later use.
BILL

Dillon Pyron wrote:

On Wed, 19 May 2004 22:16:06 GMT, Dillon Pyron
wrote:

On Wed, 19 May 2004 21:53:18 GMT, Rosalie B.
wrote:

"Sam" wrote:


Once again I ask has anyone
ever heard of a MILD hurricane season approaching? Now they are trying to
scare everyone with the GLOBAL WARMING effect being the cause. Just relax
and get on with your life.

Yes - a couple of years ago the years that followed El Nino (IIRC - or
maybe it was El Nina or something) were predicted to be mild and they
were.


grandma Rosalie

There was an article in Ocean Navigator about 2 years ago about the
various atmospheric oscillations. One of the comments was on how
these affect the various hurricane/typhoon/cyclone seasons. I'll look
it up and post appropriate sections.

From the March/April 2003 issue of Ocean Navigator:

"During an El Nino, the trade winds decrease in force over the
tropical Pacific Ocean, and hurricanes usually increase in frequency
and ferocity over the eastern Pacific and reduce in frequency and
ferocity over the tropical Atlantic."

"During La Nina the reverse occurs. Hurrican frequency and ferocity
increase over the tropical Atlantic, along with a decrease in
trade-wind velocity."

"The NAO (North Atlantic Oscillation) also appears to affect hurricane
activity over the tropical Atlantic. When the NAO is in its negative
phase, sea surface pressures are lower than normal over the central
subtropical area - this high-pressure area is often called the Bermuda
High. Sea-surface temperatures are higher than normal, encouraging
convection and hurricane formation in the easterly waves that
originate in summer over the deserts of west Africa, and move westward
with the trade winds."

We are currently in a La Nina phase of the ENSO and are in a negative
phase of the NAO. ENSO has a cycle time of 2 to 7 years, while the
NAO cycles about every 40 years.

So, it appears the the ENSO and NAO currently favor a strong hurricane
season in the Atlantic. The reader is to supply his/her own grain of
salt.
--
dillon

When I was a kid, I thought the angel's name was Hark
and the horse's name was Bob.

have you ever had to make a claim against the insurance policy?

chilly wrote:

"Charlie Hammond" wrote in message
...
In article t,
(snip) Also keep in mind that you will probably NOT loose all of your
vacation
money. Most resorts and airlines will (inspite of the original posters
statements) make a full or partial refund under most conditions --
certainly if a hurrican makes thier providing the contracted services
impossible.

My advice is to SAVE the money you would pay for trip insurance.
Every few years you'll have saved enough to treat yourself to a
better vacation -- maybe even a "free" one.


I hear you and generally follow that route. However, on my last trip, there
was quite a bit of travelling involved, a number of different destinations
included. I wanted to make sure that I had travel interruption insurance.

Forgot the best one. BILL
http://vortex.plymouth.edu/hur_dir/hur_pos_nt3.html

William Boyd wrote:

http://vortex.plymouth.edu/tropical.html
http://vortex.plymouth.edu/
These locations will keep you up to date, Bookmark them for later use.
BILL

Dillon Pyron wrote:

On Wed, 19 May 2004 22:16:06 GMT, Dillon Pyron
wrote:

On Wed, 19 May 2004 21:53:18 GMT, Rosalie B.
wrote:

"Sam" wrote:


Once again I ask has anyone
ever heard of a MILD hurricane season approaching? Now they are trying to
scare everyone with the GLOBAL WARMING effect being the cause. Just relax
and get on with your life.

Yes - a couple of years ago the years that followed El Nino (IIRC - or
maybe it was El Nina or something) were predicted to be mild and they
were.


grandma Rosalie

There was an article in Ocean Navigator about 2 years ago about the
various atmospheric oscillations. One of the comments was on how
these affect the various hurricane/typhoon/cyclone seasons. I'll look
it up and post appropriate sections.

From the March/April 2003 issue of Ocean Navigator:

"During an El Nino, the trade winds decrease in force over the
tropical Pacific Ocean, and hurricanes usually increase in frequency
and ferocity over the eastern Pacific and reduce in frequency and
ferocity over the tropical Atlantic."

"During La Nina the reverse occurs. Hurrican frequency and ferocity
increase over the tropical Atlantic, along with a decrease in
trade-wind velocity."

"The NAO (North Atlantic Oscillation) also appears to affect hurricane
activity over the tropical Atlantic. When the NAO is in its negative
phase, sea surface pressures are lower than normal over the central
subtropical area - this high-pressure area is often called the Bermuda
High. Sea-surface temperatures are higher than normal, encouraging
convection and hurricane formation in the easterly waves that
originate in summer over the deserts of west Africa, and move westward
with the trade winds."

We are currently in a La Nina phase of the ENSO and are in a negative
phase of the NAO. ENSO has a cycle time of 2 to 7 years, while the
NAO cycles about every 40 years.

So, it appears the the ENSO and NAO currently favor a strong hurricane
season in the Atlantic. The reader is to supply his/her own grain of
salt.
--
dillon

When I was a kid, I thought the angel's name was Hark
and the horse's name was Bob.

"William Boyd" wrote in message
...
Now I think Bowman would make a good used car salesman, and he is a fair
insurance salesman.

Neither. I take it you're not a consulting detective, like Sherlock Holmes.