i can say this as sure as anything else in this world: anyone who defends insurance companies has surely, surely never actually dealt with one in a time of need.

hn is full of hypersmart young people with very weak mental models of how things actually work in the real world beyond the tech industry, and probably have had very few if zero bad things happen to them (yet).

One problem with the pessimistic mental model is that it provides nowhere else to go with reasoning. For example, how can a tracking device cause problems with insurance claims, if insurance companies never pay claims anyway? If the worst is always expected, then any heuristic returns the same result.

The other problem is that it's contradicted by mountains of evidence--insurance companies pay millions of claims ever year. I know a lot of people who have been paid for losses by insurance companies, including me, even when they were at fault.

Extreme pessimism is itself a weak mental model in that it does not adapt itself to evidence. It takes no effort at all to parachute into any given conversation and say "that'll never work."

That implies an exclusively pessimistic model, however. My suggestion was to simply have a more pessimistic prior. As you say, insurance has to pay out _something_ _sometime_ by the data, and I've certainly seen some of those payouts myself (and sometimes even had them be advantageous in my favor), but if there's enough prior for adversarial interaction it seems a more more robust approach to plan for a worst case scenario even if it doesn't end up happening; or at least don't be exclusively optimistic, for this provides the same but inverted issues as exclusive pessimism.

Yes, surely I have. I've had nothing but positive experiences with auto insurance companies. Health insurance is another story.