Bitcoin insurance

[casehall30]

I was curious to know if anyone would be interested in insurance for their bitcoins.  I'm in  just process of starting one here in the U.S.  I have the financial backing needed to pull this off just have to prove to investors that people actually would want it. 

[Tx2000]

Explain.

[canth]

I was curious to know if anyone would be interested in insurance for their bitcoins.  I'm in  just process of starting one here in the U.S.  I have the financial backing needed to pull this off just have to prove to investors that people actually would want it. 

Interested. PM me when you are ready to discuss in more depth.

[franky1]

another noob post generating interest in peoples minds to then demand cash out of them later

unless the noob proves who he really is in real life, and proves his financial credentials. do not be fooled into giving an anonymous third party any money, simply based on a promise..

.. dont get goxxed

[fr4nkthetank]

insurance would be paid by.....whom?

the users?
the exchanges?

how much, what rates.....if the risk of loss is to zero, and that risk is high....then insurance becomes impractical

[BittBurger]

I was curious to know if anyone would be interested in insurance for their bitcoins.  I'm in  just process of starting one here in the U.S.  I have the financial backing needed to pull this off just have to prove to investors that people actually would want it. 

I dont think you would have to prove to investors that someone would want insurance.

Your investors will want insurance.  Everyone wants insurance.   The entire mantra of the last 3 months has been "Boy I wish Bitcoin holdings had insurance".

-B-

[IrishFutbol]

Is this going to be like a bank that would store bitcoins?  Or like an AIG where you're selling insurance on a loss in value of BitCoins?

[andy10000]

insurance would be paid by.....whom?

the users?
the exchanges?

how much, what rates.....if the risk of loss is to zero, and that risk is high....then insurance becomes impractical

Ultimately it will be paid by the users. All business expenses are ultimately paid by their customers.

[altnoob]

Just to clarify.  This would be an insurance policy against the loss of bitcoins?

What would the covered perils entail?

i.e. If a tornado knocks your house down and your usb gets lost would that get covered?

If its theft how do you prove in order to get paid back.  In a normal insurance claim of theft a police report would have to be filed in order to substantiate a claim otherwise you could call your insurer and state that your television and jewelry was stolen and they would send you a check ... obviously not a good business model for a company paying out ... and yes you could simply file a false police report however that is a barrier that most people 9/10 won't cross.

What would the policy limits look like?

In a currency such as usd or based on qty of btc?

i.e. $5,000 usd or 10btc

How many btc's would you have on any given day to support claims?

In the event of another Gox would you have at least 7500 btc or would you go bankrupt?


Sorry I could go on forever.

... just interested as I hold multiple US/state insurance licenses and know that if done properly it can be profitable however there are a lot of obstacles for something like this and unless you have been in the field for as long as I have some might be overlooked.

[altnoob]

insurance would be paid by.....whom?

the users?
the exchanges?

how much, what rates.....if the risk of loss is to zero, and that risk is high....then insurance becomes impractical

Ultimately it will be paid by the users. All business expenses are ultimately paid by their customers.

It would have to be paid by the users based on premiums paid and an initial bankroll of the company.

It would have to be a company like Allstate that has an escrow account for claims payable and paid directly to that. 

In the event that a third party is liable for the loss, i.e. gox then the company could subrogate against them for reimbursement

All fine in theory however as btc is an unregulated market its very difficult.

Also you would have to insure based on an agreed upon current market value.  If you insure at 500 but btc goes up to 1k and its stolen you would only get $500 worth of btc back.  On the flip if you insure at $500 and it goes down to $200 then you would only get $200.

[ryanmnercer]

FYI, insurance industry is highly regulated... it's going to be hard to get off the ground and cost a fortune.

[BitCoinsLOL]

Is this going to be like a bank that would store bitcoins?  Or like an AIG where you're selling insurance on a loss in value of BitCoins?

AIG that worked out great another fine product of Deregulation.

[franky1]

i see this happening very easily:

i lost all my bitcoins, i had 1million of them. the thief moved them from 1yyyyyyyyyyyyyyyy to this address 1xxxxxxxxxxxxxxxxxxxxxxx
and now my 1yyyyyyyyyyyyyy is empty. lets make a claim

<receive 1million coins>

.. now to use the private key i have secretly stashed away for the 1xxxxxxxxxxxxxxxxxxxxx that i pretended not to own.

<3 claims later from random people>

insurance company have no more new insurance premiums's coming because the openly viewable insurance wallet is now empty. they can no longer guarantee payouts and everyone asks for a refund of their premium.

insurance company is now bankrupt

now tell me how will an insurance company prove or disprove a theft and that thief is not also the claimant

[Beliathon]

[LiteCoinGuy]

there is already one exchange in the UK where you can insure your funds. but one more would be nice ;-)

[fr4nkthetank]

Is this going to be like a bank that would store bitcoins?  Or like an AIG where you're selling insurance on a loss in value of BitCoins?

AIG that worked out great another fine product of Deregulation.

Then that's different.  Nothing stops someone from creating an OTC derivative contract say Mt gox credit default swap where if they default/failure to pay back users within x time frame it is triggered, and the price would be based on investors in that product's view on Mt gox credit risk.

only way 'insurance' here would work.  Hmm.  PM me then if someone is interested, i would see people trading this product based on all the chatter regarding being goxx'ed for example

[IrishFutbol]

i see this happening very easily:

i lost all my bitcoins, i had 1million of them. the thief moved them from 1yyyyyyyyyyyyyyyy to this address 1xxxxxxxxxxxxxxxxxxxxxxx
and now my 1yyyyyyyyyyyyyy is empty. lets make a claim

<receive 1million coins>

.. now to use the private key i have secretly stashed away for the 1xxxxxxxxxxxxxxxxxxxxx that i pretended not to own.

<3 claims later from random people>

insurance company have no more new insurance premiums's coming because the openly viewable insurance wallet is now empty. they can no longer guarantee payouts and everyone asks for a refund of their premium.

insurance company is now bankrupt

now tell me how will an insurance company prove or disprove a theft and that thief is not also the claimant

This is what kind of has me confused.

There is no way a company would insure someone's bitcoins from theft and at the same time, allow them to be the one holding onto the coins.

[stsbrad]

i see this happening very easily:

i lost all my bitcoins, i had 1million of them. the thief moved them from 1yyyyyyyyyyyyyyyy to this address 1xxxxxxxxxxxxxxxxxxxxxxx
and now my 1yyyyyyyyyyyyyy is empty. lets make a claim

<receive 1million coins>

.. now to use the private key i have secretly stashed away for the 1xxxxxxxxxxxxxxxxxxxxx that i pretended not to own.

<3 claims later from random people>

insurance company have no more new insurance premiums's coming because the openly viewable insurance wallet is now empty. they can no longer guarantee payouts and everyone asks for a refund of their premium.

insurance company is now bankrupt

now tell me how will an insurance company prove or disprove a theft and that thief is not also the claimant

This is exactly why they can't be insured

[CurbsideProphet]

I was curious to know if anyone would be interested in insurance for their bitcoins.  I'm in  just process of starting one here in the U.S.  I have the financial backing needed to pull this off just have to prove to investors that people actually would want it. 

In addition to all the questions already asked, who will do the underwriting?  You?  Or do you have a team of people who understand Bitcoin enough to properly assess risk?

[Brangdon]

now tell me how will an insurance company prove or disprove a theft and that thief is not also the claimant

The way Elliptic works, they store the coins for you. You don't have the private key, they do. That's sounds logical; insurance fraud aside, they can't know how secure your computer is against keyloggers etc. The reason they are willing to offer insurance is that they have confidence in their own storage. No-one can steal the coins, not even you.

I think that kind of insurance will become quite common. The vaults that offer insurance will probably offer other services, like making regular scheduled payments. They be much like an online bank.