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[Right Now] Insurance Payouts Recalculation

First post
Author
Senyu Takashi
NGC research and development
#61 - 2014-12-03 22:32:20 UTC
What is this "insurance" you speak of?

Anyway seriously now, last time I insured a ship was.......2 years ago? Cant remember exactly. And I actually live in npc 0.0 without alliance SRP being available to me.
Mr Omniblivion
Ministry of War
Amarr Empire
#62 - 2014-12-03 23:38:11 UTC
"I never used them anyways but I'm upset that it's gone now"

heh.

Also, yes, remove insurance or replace it with an alternate currency (a new type of LP!). Insurance is a pretty big faucet.
Lucius Uta
Not really a corp
#63 - 2014-12-04 09:05:47 UTC  |  Edited by: Lucius Uta
I wish all the people who claim that insurance is an ISK faucet would explain how you can actually earn money using insurance. I must be doing something wrong since payout costs for me (even with platinum insurance) are always lower than the hull's value.
Yes I know it makes me pay less for the ship than it's actually worth, but I could accomplish similar results with buy orders, so might as well remove those too.
Janeway84
Insane's Asylum
Evil Monkies Incorporated
#64 - 2014-12-04 09:22:24 UTC
This bad, its a change in the opposite direction of all other changes this year. Sad
Senyu Takashi
NGC research and development
#65 - 2014-12-04 13:10:48 UTC  |  Edited by: Senyu Takashi
Its an ISK faucet when you look at it from a bigger perspective.

Lets assume that we now have 0 ISK(just as an example) in circulation in the EVE economy.

Player A kills few rats and earns 2M ISK. -- Thats 2M ISK "in" the economy.

Player A buys a ship for 1M from player B. -- Still 2M ISK in economy (player A has 1M, player B has 1M).

Player A insures his ship for 800k payout, the cost is 100k. -- Now its 1,9M ISK in economy (player A has 900k, player B has 1M).

Player A gets killed and receives 800k ISK from insurance payout. -- Now its 2,7M ISK in economy (player A has the previous 900k + 800k insurance payout, player B still has 1M ISK).

So basically, insurance payout added 700k ISK (800k - its cost 100k) to the EVE economy, raising the number from 2M to 2,7M. Use this example for any ship in the game.
Strange Shadow
Hedion University
Amarr Empire
#66 - 2014-12-04 13:20:38 UTC
Whole insurance system is broken, and should be removed altogether from the game, and maybe reinvented from scratch to make any sense.
It is NOT intuitive - go try to figure what insurance price it is based on, or where you will or will not get a payment - there is more exceptions than rules.
It is NOT new player friendly, they barely has money to buy the drake, let alone insure it (and let those money go waste if lucky drake actually survives).
It is NOT old player friendly (even more unfriendlier now as per OP).
It spawns isk out of thin air each time ship explodes (because 40% default insurance) causing general isk inflation (yes i know ratting spawns even more, and yes that is not excused to spawn even more isk beside rats).

Maybe some kind of consolation T-shirt, or just random vanity item (depending on exploded hull size), which you could (maybe) sell on market would made more sense to me.
Jessica Danikov
Network Danikov
#67 - 2014-12-04 13:24:38 UTC  |  Edited by: Jessica Danikov
Lucius Uta wrote:
I wish all the people who claim that insurance is an ISK faucet would explain how you can actually earn money using insurance. I must be doing something wrong since payout costs for me (even with platinum insurance) are always lower than the hull's value.
Yes I know it makes me pay less for the ship than it's actually worth, but I could accomplish similar results with buy orders, so might as well remove those too.


We're talking about the EVE-wide economy, not your individual wallet. When you buy a ship, all you're doing is trading currency for a hull (ultimately an assembly of raw materials such as minerals). Very little currency is destroyed (only market fees and such) in the process; none if you do a direct trade.

Insurance purchases are an ISK sink: that money spent goes nowhere and is removed from the universe.

Insurance payouts are an ISK faucet: the money comes from nowhere and is magic'd into existence. However, due to the fact the process is intrinsically tied to the destruction of a hull and tied to hull value indices, you could also think of it as a mineral -> ISK conversion process (yes, you could 'mine' ISK by manufacturing hulls then destroying them while insured, but they're probably worth more on the market). By paying upfront with insurance, you make that conversion more efficient. However, with regards to ISK alone, it's still a faucet.

Overall, insurance payouts are far greater than purchases, so the net effect of both makes insurance an ISK faucet.

If you look at the Economics presentation at FanFest, they usually cover Faucets and Sinks and you can see just how big a faucet insurance payouts are (IIRC it's in the top 5, but one of the smaller 5).
tiberiusric
Comply Or Die
Lord of Worlds Alliance
#68 - 2014-12-04 14:09:15 UTC
oh god yet another fozzie bright idea..

so you do a good thing by removing clone costs so people fly more, now you do something to completely counter it, by stopping people wanting to fly T2 ships. Why didn't you just tweak it rather than go back the start?

just remove insurance full stop then rather than make it an annoyance

All my views are my own - never be afraid to post with your main, unless you're going to post some dumb shit

Lucius Uta
Not really a corp
#69 - 2014-12-04 14:28:27 UTC
Good explanations from Senyu and Jessica, but can ISK caused from insurance really cause inflation when money added to the economy from insurance payouts doesn't come without coverage, but it's being tied to a value of another item (which itself has coverage)? Won't it just reduce the effective value of the said item? From what I know, inflation is caused when money is printed without coverage. Or it will just cause smaller inflation than it would in case the supply of ships were endless?
Senyu Takashi
NGC research and development
#70 - 2014-12-04 15:07:41 UTC  |  Edited by: Senyu Takashi
Lucius Uta wrote:
Good explanations from Senyu and Jessica, but can ISK caused from insurance really cause inflation when money added to the economy from insurance payouts doesn't come without coverage, but it's being tied to a value of another item (which itself has coverage)? Won't it just reduce the effective value of the said item? From what I know, inflation is caused when money is printed without coverage. Or it will just cause smaller inflation than it would in case the supply of ships were endless?


No, inflation is created when currency loses its value. Yes I know that welping a 25m harpy doesnt seem like such a big deal, but imagine that someone welps a platinum insured JF (and JFs are getting ganked on a daily basis). Thats several billion of ISK created out of thin air and deposited into economy.

More ISK created than deleted -> too much ISK -> ISK loses value -> prices skyrocket.


EDIT: In the end, the people that are hurt by this the most are mission farmers and 0.0 ratters since their income is composed of liquid ISK that essentialy lost its value.
Industrialists, researchers, miners, salvagers and relic/data site hunters are either affected less or completely untouched, since material, salvage and item prices rise in response to the inflation, so their ISK balance (income - expenses) remains almost the same.

EDIT 2: Imagine it like this: Player A is a salvager, player B is 0.0 ratter. Prices used are an example.
Player A finds a pile of wrecks and gets 100 armor plates from them. Each plate costs 1M so thats 100m ISK of income for him.
Player B rats in 0.0 for an hour and gets 100m ISK from bounties.
Both players can now buy an Ishtar that costs 100m ISK.
-----Two weeks later, inflation hits and all items double in price------------------------------------
Player A finds a pile of wrecks and gets 100 armor plates from them. Each plate costs 2M so thats 200m ISK of income for him.
Player B rats in 0.0 for an hour and gets 100m ISK from bounties.
Player A can buy an Ishtar that now costs 200m, however player B cannot, since he has earned only half of its price.

By this, players ratting in 0.0 and mission farmers should actually be happy that the payout is going down, since it will prevent their ISK making activities from becoming obsolete.
Jessica Danikov
Network Danikov
#71 - 2014-12-05 12:14:45 UTC
We could get rid of ISK payouts entirely and have wrecks drop more than just rig salvage, but actual components based on insurance level (which really tickles as, if you lose, the benefits of said insurance remains on the field, which is a nice, risky cost/benefit choice).
Jessica Danikov
Network Danikov
#72 - 2014-12-05 13:01:42 UTC
Lucius Uta wrote:
Good explanations from Senyu and Jessica, but can ISK caused from insurance really cause inflation when money added to the economy from insurance payouts doesn't come without coverage, but it's being tied to a value of another item (which itself has coverage)? Won't it just reduce the effective value of the said item? From what I know, inflation is caused when money is printed without coverage. Or it will just cause smaller inflation than it would in case the supply of ships were endless?


If anything, this amplifies the inflation-like effects of insurance. Not only are you destroying commodities, you're creating new currency, unlike, say, bounty payouts that purely generate ISK. ISK's value is derived relative to its purchasing power of mineral-based goods (PLEX is entirely irrelevant as it merely facilitates the movement of ISK), so if the supply of ships were endless, the entire system would be devalued. The whole point is that both ISK and ships are limited in rate of supply.
RavenPaine
RaVeN Alliance
#73 - 2015-01-17 20:33:49 UTC
I remember a time when T1 Battleship insurance would damn near cover the total loss. So, lets say you bought a Raven for 65 mill, and fittings were another 25 mil, and Platinum insurance was 30 mil, you had a total of 120 million in the ship. Payout would give you back 110 and your personal total loss was about 10 million. (Going from memory, costs vary of course)

The thing is though, more PvP was had, because it was affordable. People would blow up BS every night, because it was cheap.

I have to think that all that turnover was good for the economy in several ways. Ship builders, module builders, rig builders, drone builders, etc, all moved more product (but at less margins).
This turnover helped miners, haulers, marketers as well.
Short version: jobs were created.

As for ISK in the economy: Every State and Nation I know of, works hard to create jobs, because jobs HELP the economy.
As a player, if I have more ISK than I need, it just sits in my wallet or I convert it to ships in my hanger. The conversion puts ships and ISK on the same level as a currency. So yeah, I generate ISK from thin air, but yeah I also explode a ship into thin air in the process.
I'm not sure that more ISK is a bad thing tbh. People quote "inflation" or "devaluation" formulas, but in a game where everyone has the same opportunities to generate wealth, those formulas don't impact anyone harshly.

I do understand, that they might affect PLEX sales/cost. And from a business aspect, I understand that those costs might need to be regulated.
Barrogh Habalu
Imperial Shipment
Amarr Empire
#74 - 2015-02-01 10:19:38 UTC
RavenPaine wrote:
I remember a time when T1 Battleship insurance would damn near cover the total loss. So, lets say you bought a Raven for 65 mill, and fittings were another 25 mil, and Platinum insurance was 30 mil, you had a total of 120 million in the ship. Payout would give you back 110 and your personal total loss was about 10 million. (Going from memory, costs vary of course)

The thing is though, more PvP was had, because it was affordable. People would blow up BS every night, because it was cheap.

Did insurance cover modules? Because if not, from your explanation it seems like you could net a profit from blown hull. At any rate, I can see why that was removed, although I guess it was a fun world to live in for the time being.
Tyranis Marcus
Bloody Heathens
#75 - 2015-02-06 00:46:10 UTC
Phoenix Jones wrote:
Can I insure my pod and implants. It'll sting less if I get some cash back when I'm podded, also it would stop me from ripping my implants out my head before I die.

Something like a percentage back based off the killmail loss of the pod, minus any specialty implants like the golden pod.


Nah, they should make it so that if you rip out implants while in combat, you lose skillpoints.

Do not run. We are your friends.

Tiddle Jr
Brutor Tribe
Minmatar Republic
#76 - 2015-02-15 10:55:43 UTC  |  Edited by: Tiddle Jr
Senyu Takashi wrote:
Its an ISK faucet when you look at it from a bigger perspective.

Lets assume that we now have 0 ISK(just as an example) in circulation in the EVE economy.

Player A kills few rats and earns 2M ISK. -- Thats 2M ISK "in" the economy.

Player A buys a ship for 1M from player B. -- Still 2M ISK in economy (player A has 1M, player B has 1M).

Player A insures his ship for 800k payout, the cost is 100k. -- Now its 1,9M ISK in economy (player A has 900k, player B has 1M).

Player A gets killed and receives 800k ISK from insurance payout. -- Now its 2,7M ISK in economy (player A has the previous 900k + 800k insurance payout, player B still has 1M ISK).

So basically, insurance payout added 700k ISK (800k - its cost 100k) to the EVE economy, raising the number from 2M to 2,7M. Use this example for any ship in the game.


Such an ideal scenario.

However how many ships being used and lost not insured. And usually people don't fly a naked ships, they buying fitting and ammo and drones which are not insured as well.

"The message is that there are known knowns. There are things we know that we know. There are known unknowns. That is to say there are things that we now know we don't know. But there are also unknown unknowns. There are things we don't know" - CCP

Kiandoshia
Sebiestor Tribe
Minmatar Republic
#77 - 2015-03-02 19:46:46 UTC
Tiddle Jr wrote:


Such an ideal scenario.

However how many ships being used and lost not insured. And usually people don't fly a naked ships, they buying fitting and ammo and drones which are not insured as well.


None of that money disappears.
Hakaari Inkuran
State War Academy
Caldari State
#78 - 2015-04-24 23:09:30 UTC
Remind me why does insurance exist again?
SFR SaFeRa
Doomheim
#79 - 2015-05-14 03:55:19 UTC
This is a radical thought but: What about basing insurance payouts on the market price of a ship, and not the material cost? I love the gnosis, think it is a great ship, but since material cost is one trit, you have a 6 isk insurance, which, as a new player, is too little on a 70 mill hull i will lose. See also: Exhumer, etc.
Velarra
#80 - 2015-06-10 14:49:47 UTC
Can you imagine the streams of colourful 'feedback' and statue bashing that'd commence if one could spend Aurum for "Elite Premium" ship insurance? ;)