Woman makes $420k by buying insurance on flights she predicted would get delayed (mothership.sg)

Article summary

A 45-year-old woman in China made approximately $420,000 by buying insurance on flights she predicted would be delayed, using over 20 different identities to avoid detection. She used her knowledge of the airline system to selectively take out insurance on flights that were likely to be delayed. The woman was eventually arrested and the insurance companies have since fixed the loopholes she exploited. The incident raises questions about the nature of insurance and the intentions of those who purchase it.

Main themes

• insurance fraud
• intent of insurance contracts
• risk assessment
• ambiguity of insurance clauses
• insurable interest
• betting and speculation

What commenters say

• Buying insurance on flights predicted to be delayed is a form of fraud because it subverts the intent of insurance contracts.
• The new clause introduced by insurance companies, which denies payout if the insured reasonably deduces the flight will be delayed, is overly broad and could be used to deny legitimate claims.
• The distinction between having specific knowledge of a flight's delay and making a reasonable deduction based on available information is crucial in determining the validity of an insurance claim.
• Insurance companies have a responsibility to accurately assess and price risk, rather than relying on ambiguous clauses to deny claims.
• The practice of buying insurance on predicted delays is analogous to other forms of betting or speculation, such as options trading, and should be treated similarly.
• The concept of 'insurable interest' is essential in distinguishing insurance from other forms of betting or speculation, and the woman in question did not have a legitimate insurable interest in the flights she insured.
• The ambiguity of the new clause could lead to insurance companies unfairly denying claims and undermining the trust in the insurance system.