Magic item insurance policy?

[Jon_Dahl]

I have an adventurers' guild in my game and I'm always looking ways to make it more appealing without making it more convoluted. Simple ideas how to improve the guild are the thing that I want.

So I have this idea that low-level adventurers could insure their gear (permanent items only, including masterwork weapons and armor) for 40 gp per year, mid-level 100 gp per year and high-level (all gear with temporary items included) 400 gp per year. When an item is destroyed, it must be an accident not attributed to gross negligence. After a routine investigation, the gear's value will be either paid in gold or a similar item will offered to the member.

Could this work? And would your character like this insurance?

[nedz]

Hmm, given the usual causes of the loss of magical items: I suspect that members of the Guild of Loss Adjusters could easily earn more xp than members of the Guild of Adventurers. So who insures their items ?

[Psyren]

Given the risk adventurers constantly face I'd expect much higher premiums than that - especially in 3.5 where magic items can't be fixed at all...

[Aleolus]

Given the risk adventurers constantly face I'd expect much higher premiums than that - especially in 3.5 where magic items can't be fixed at all...

Actually they can. The base item has to get fixed, then the enchantment needs to be 'repaired' seperately by someone who can enchant that type of item to begin with, using the. same rules as normal repairs (I think half costs and half time that it would take. to make a new one, but I'm not sure on that)

[Eisfalken]

Actually they can. The base item has to get fixed, then the enchantment needs to be 'repaired' seperately by someone who can enchant that type of item to begin with, using the. same rules as normal repairs (I think half costs and half time that it would take. to make a new one, but I'm not sure on that)

One caveat: this is only specifically listed in Craft Magic Arms & Armor, Craft Wondrous Item, and Forge Ring. That means that by RAW even fairly permanent items of other kinds can't be repaired, as their descriptions specifically don't state that they can be like the other feats do. This means that rods (most of which are permanent with charges/day), runestaffs, eternal wands, and similar items are gone once broken. It's not a "big" issue, but I wanted to point that one fact out, if it comes down to a debate.

Having said that... I think as a DM that it is most assuredly not out of the question to just use the same rules for all items that aren't scrolls, potions, or have limited charges (wands, staffs, etc.). It is a house rule, but it is a very common-sense house rule, considering these feats were written before they conceived of the permanent versions of those other items.

[Jon_Dahl]

Given the risk adventurers constantly face I'd expect much higher premiums than that - especially in 3.5 where magic items can't be fixed at all...

Fair enough. Do you have any suggestions for a better premium?

[Bobby Baratheon]

Honestly, as an adventurer I'd pay ten times the high level premium without blinking. That's an insanely good deal. Also, how trusting is this guild? Have there ever been members who scammed them on the insurance policy? Also, this is on a per-item basis, right?

[Eisfalken]

Regarding ways to make an Adventurer's Guild more appealing....

I do not think it is a good idea to do insurance on magic items, even if you can repair them. Recovery is a huge issue right off the bat. First you need to use some fairly not-common magic to locate the items, then you need even more to get in there and take them back. Did the PCs die to a dragon? Sorry, that dragon considered that loot part of the hoard now; screw with that bad boy at your own risk. There'd have to be a LOT of money involved to be worth it to the guild.

Second off, let's somehow presume the PCs do survive. Yes, it sucks that they lost their stuff, but that's actually where the guild can help them. Instead of a policy on the items themselves, offer members first dibs on lower-level adventures where they can rebuild their supplies. I wouldn't care about not getting XP for beating up kobolds; I just need to get treasure and stuff to get better items eventually. This is a way for a DM to keep players from feeling like crud for losing a fight, even if they get rezzed later: just grab any random lower-level adventure, cram them through it, and in no time your whole campaign is back on track.

In fact, it's kind of fun to do that. I ran a similar situation (PCs were stripped and imprisoned, but the items were whisked away to a very distant location). The players were a little uneasy at first, but once they realized I was reverting to much lower CR monsters they could easily beat unarmed, they relaxed into it and had a huge amount of fun. (Side note: be very communicative with the players. They can be really anxious about losing their stuff, so you have to be there to assure them they aren't being permanently deprived, you're just running a new side thing for them.)

If I may suggest, build your guild out as an affiliation (PH2), where status in the guild confers a given set of benefits. Here's an example of how I might build it out:

The Intrepid Explorer's Society
Symbol: Club members wear either pendant or ring which displays a stylized compass rose (similar to those drawn on maps) with a single thin triangle of red garnet on the north axis. On close inspection, the compass is incredibly detailed, indicating the 8 principal winds and 8 half-winds, along with degree measurements. This makes duplication nearly impossible without magical help, and almost all members have their tokens marked magically to indicate proof. Somewhere on the reverse of the token is usually etched the club's motto "Who dares do more is none".
Background, Goals, and Dreams: What started as a loose affiliation of explorers and scavengers blossomed over the decades into a social club for those with a taste for adventure, excitement, and fortune. The club provides an environment where its members can share data on potential interest for finding lost treasures. Though not in any way a criminal venture, it has a somewhat infamous reputation among the aristocracy; it is not exactly rare for trouble to follow such treasure hunters back to the cities they seek to employ their acquired wealth. However, despite any problems that may arise, the fact is plain that wherever the club establishes a chapter house, the local economy soars: not only do adventurers buy out loads of goods that they need, but bring back enough profit most times to also stimulate any business, from builders (who make the newly-rich folk strongholds to work from) to entertainers and everything in-between. The group has no politics per se, but tends to butt heads repeatedly with both priestly and arcane institutions who warn of their daredevil attitude regarding some things that are best left undisturbed. And yet, even these opponents reluctantly contact the club, too, when they need to find those foolhardy enough to undertake dangerous missions. The common folk are themselves somewhat divided. Those who profit praise its members, those who lose loved ones to misadventure condemn them.
Type: Social club
Scale: 10 (multiregional/cities)
Positive Affiliation Criteria
Expertise & power: +1/2 character levels
Sponsored by existing members: +1 per sponsor (max +4)
Completes a successful adventure with other members: +1 per adventure*
Completes a successful extraplanar adventure (with or without other members): +2 per adventure
Discovers an unrecorded spell or magic item: +1 per 5 caster levels need to cast spell or make item*
Discovers an artifact: +8*
Donates money or adventuring gear to the club: +1 per 1,000 gp (max of +3 per year)
(*You must report this activity to the club leaders, who will publish it in a gazette that is sent to all chapter houses.)
Negative Affiliation Criteria
Destroys recovered treasure or permits other individuals and groups to seize it: -1 per 10,000 gp
Attacks any club member for any reason other than self-defense: -1/2 of member's affiliation score if they live, or full affiliation score if they die
Conceals adventuring activities from club: -1 per adventure later discovered
Knowingly discloses member activities to nobles: -1 per disclosure (-2 if noble is royalty)
Titles, Benefits, and Duties
Associate (4-10): You are given a token of membership, and permitted to enter chapter-houses during official functions (meetings, lectures, presentations, etc.). You also tend to receive word of possible expeditions sooner than "regular" adventurers.
Fellow (11-16): You have access to the club's library, which gives a +2 circumstance bonus to Knowledge (geography), Knowledge (history), and Knowledge (local) checks, and allows you to make those checks untrained. You also get a +1 to Diplomacy checks with local merchants for the purposes of haggling.
Compeer (17-22): Using the club's network of chapter-houses, member estates, and other assets, you can now use Gather Information in any community that is the size of a small city or bigger. You may use the club to buy and sell goods as if you were in the largest community available in your setting that the club has access to, but travel times do delay the speed of making these transactions, and you must pay all travel costs for a club agent to make the deal. Club members use this ability to avoid having to return to large communities after successful adventures to sell what they recover.
Advisor (23-28): The club's contacts allow you to buy all entries in the Spellcasting and Services table in the PHB pg. 129 at 3/4 cost.
Councilor (29+): You gain access to the club's staff of agents. This works like the Leadership feat, with a Leadership score equal to half your affiliation score, but these agents will not go into the field with you; they remain in the communities you have access to them in. The cohort agents can perform a single 8-hour task per week, or any brief task no longer than an hour once a day. The follower agents can perform any 8-hour task in one day, which can include making various skill checks, working as guards, or even just attending on your as a valet. They are most commonly used to identify magic items, buy and sell goods, and otherwise free a club member from the more boring tasks that must be done between adventures.

[Jon_Dahl]

I will double the prices, then.

[ace rooster]

I have an adventurers' guild in my game and I'm always looking ways to make it more appealing without making it more convoluted. Simple ideas how to improve the guild are the thing that I want.

So I have this idea that low-level adventurers could insure their gear (permanent items only, including masterwork weapons and armor) for 40 gp per year, mid-level 100 gp per year and high-level (all gear with temporary items included) 400 gp per year. When an item is destroyed, it must be an accident not attributed to gross negligence. After a routine investigation, the gear's value will be either paid in gold or a similar item will offered to the member.

Could this work? And would your character like this insurance?

ah, I see. It simply never pays out to PCs. :smalltongue:

This strikes me as a terrible idea from both an in game and a metagame perspective. In game the premiums would have to be huge for this to be profitable, because claims will be very frequent and the value of items does not decline. Insurance works on the assumption that the customer cannot afford to take on a particular risk, so an insurance company takes the risk for a premium. If it is almost certain that a claim will be made then risk is barely a factor and the assumption breaks down. Do you think racing cars are insured?
From a metagame perspective I don't like this either. At best it removes an element of risk from the game, making the players actions have less consequences, and at worst your game degenerates into an argument with an insurance company. Arguing with insurance companies is nobodies idea of a good time.

Guilds lending items for particular quests would be one way to go. This would probably rely on long term members being trusted, and guild reputation being important. Another would be to have arms regulations in major settlements forcing adventures to go through guilds to get military hardware.

[Zaq]

I actually work for the insurance industry, so this is a pretty cool topic that I'll try to explore later when I have more time. For now, though, I just want to add that the most expensive insurance plan should put a 20th level Truenamer on retainer for you. If an insured item gets broken, you invoke Say My Name And I Am There to bring them instantly to your side, and they'd use Rebuild Item on your behalf.

[A_S]

I actually work for the insurance industry, so this is a pretty cool topic that I'll try to explore later when I have more time. For now, though, I just want to add that the most expensive insurance plan should put a 20th level Truenamer on retainer for you. If an insured item gets broken, you invoke Say My Name And I Am There to bring them instantly to your side, and they'd use Rebuild Item on your behalf.
This is actually so cool.

[Aleolus]

I actually work for the insurance industry, so this is a pretty cool topic that I'll try to explore later when I have more time. For now, though, I just want to add that the most expensive insurance plan should put a 20th level Truenamer on retainer for you. If an insured item gets broken, you invoke Say My Name And I Am There to bring them instantly to your side, and they'd use Rebuild Item on your behalf.

Like a good neighbor, State Farm is there!

[ATHATH]

Have you considered that this might be a scam by the insurance company?

If they have appropriate contacts in the legal system and/or really good lawyers (*cough* diplomancers *cough*), they could ensure that no one can actually reap the insurance money.

"If you had put better anti-theft spells on your items, they wouldn't have been stolen, so this is your fault. In fact, you put so few anti-theft spells on your items that you probably hired that thief to get the insurance money on them. Judge, I accuse Adventuring Party X of insurance fraud."

If the PC's do manage to get past the rigged courts and the lawyers, the guild could give them a terrible item that is of "equivalent" value. They could replace a Wand of Rope Trick with that Wand of Detect Undead that they picked up from those Kobolds that's been lying in the basement for a couple of years, for example.

[Jack_Simth]

I have an adventurers' guild in my game and I'm always looking ways to make it more appealing without making it more convoluted. Simple ideas how to improve the guild are the thing that I want.

So I have this idea that low-level adventurers could insure their gear (permanent items only, including masterwork weapons and armor) for 40 gp per year, mid-level 100 gp per year and high-level (all gear with temporary items included) 400 gp per year. When an item is destroyed, it must be an accident not attributed to gross negligence. After a routine investigation, the gear's value will be either paid in gold or a similar item will offered to the member.

Could this work? And would your character like this insurance?
It could work, but figuring out actual costs would be annoying.

See, Insurance premiums are based on statistics: cost of a claim (including investigation into the legitimacy of the claim, paying employees to handle stuff, and everything else that could be seen as an expense triggered by the claim) * probability of a claim + some profit margin. Once those are figured out, anything can be insured (Who Wants to be a Millionaire went with an insurance underwriter to cover winners' prizes past a threshhold... they may still go that route).

So for magic items in adventurers' hands? Depends on how you do things.

Suppose the policy has the following rules:
1) The item's owner can't have died with the item.
2) Covers accidental loss on an official quested posted through proper channels in the guild only.
3) The claim must be made by the insured person.
4) The person must have had it on them at the time of loss.
5) 1 through 4 checked by way of the 1/week Commune from a LN Wizard with an Imp familiar from Improved Familiar.
6) The item must be specifically declared when picking up the insurance policy.

Suppose it's replacement insurance: They will commission an identical item for you immediately after verification.
The Wizard is on retainer, and gets the questions 1/week, in sets of six. The question is "Is this claim legitimate and covered according to contract rules?" If the answer is "Yes", the wizard marks it as such and sends it back to the guild. If the answer is "No", the wizard marks it as such and sends it back to the guild. This wizard's decision is final.

Now, if a claim is made successfully, the cost of the claim is: Percentage of the cost of six questions by the wizard + cost of the item + a bit (employee expenses, paper, and so on).

The big question is: What's the probability of a claim? If it's, say, 1 claim per 10 covered items per year (12 months), then a 10,000 gp item has a monthly premium based n (claims per pool period) * (cost of item + Cost of verification) / (pool size) + profit margin. Employee expenses (including the wizard and paperwork) average to 50 gp/question, the pool size is going to be 120 for a monthly premium, the item is 10,000 gp, and the profit margin is "10%", then the premium is 92.125 gp/month, or 1,105.5 gp/year on that 10k item (and it'll take a week and ten days for you to receive the replacement). A 5,000 gp item would be 46.291666667 gp/month, or 555.5 gp/year. A 100,000 gp item would be 917.125 gp/month or 11,005.5 gp/year.

However: There's a LOT of game-world assumptions in that!

[ahenobarbi]

D&D economy isn't exactly realistic so if you think that'll be fun go for it.

I'd price insurance differently (1% of value of insured gear maybe (cost of verification covered by fraudsters if caught)) and maybe give them coupons to be spent in friendly Magicmart (guild gets them at discount because they'll buying lots of them).

[Jon_Dahl]

Good points here, I'm definitely stealing lots from Jack_Simth's post.
Currently I'm considering putting item value caps, such as the most expensive low-level adventurer's item that could be within the insurance policy would be worth 1500 gp. For mid-level adventurers the limit would be 4,000 gp and for high-level adventurers 20,000 gp. The idea would be that the guild can't have more loose money around at any given time.
The premium for low-level adventurers would be 40 gp; 400 gp for mid-level adventurers; and 1,500 gp for high-level adventurers.
It doesn't sound that broken anymore, but it would still work, right?

[Jack_Simth]

Good points here, I'm definitely stealing lots from Jack_Simth's post.
Currently I'm considering putting item value caps, such as the most expensive low-level adventurer's item that could be within the insurance policy would be worth 1500 gp. For mid-level adventurers the limit would be 4,000 gp and for high-level adventurers 20,000 gp. The idea would be that the guild can't have more loose money around at any given time.
The premium for low-level adventurers would be 40 gp; 400 gp for mid-level adventurers; and 1,500 gp for high-level adventurers.
It doesn't sound that broken anymore, but it would still work, right?
It's only broken if people are taking advantage - which can be done; it's called Insurance Fraud.

For instance: Even with the Commune check, there are still ways to fool the system. At some point, there's going to be a messenger going back & forth between the guild and the Wizard, carrying the loss reports. If a "not valid" gets swapped with a good forgery of the same report with "Valid" by Slight-of-hand on the messenger's way back, then the claiment can sell the item and get it replaced under policy. If the Wizard gets corrupted (Diplomancy, Dominate Person, whatever) then who's to say that he'll stamp things according to the actual results of the Commune? And so on. There's holes, they're just annoying to use.

And, of course, you could also build an adventure around that! The Guild figures out (via statistics) that someone's taking advantage, and they want you to figure out who....

[ace rooster]

It's only broken if people are taking advantage - which can be done; it's called Insurance Fraud.

For instance: Even with the Commune check, there are still ways to fool the system. At some point, there's going to be a messenger going back & forth between the guild and the Wizard, carrying the loss reports. If a "not valid" gets swapped with a good forgery of the same report with "Valid" by Slight-of-hand on the messenger's way back, then the claiment can sell the item and get it replaced under policy. If the Wizard gets corrupted (Diplomancy, Dominate Person, whatever) then who's to say that he'll stamp things according to the actual results of the Commune? And so on. There's holes, they're just annoying to use.

And, of course, you could also build an adventure around that! The Guild figures out (via statistics) that someone's taking advantage, and they want you to figure out who....

Doesn't have to be fraud. Could be good old fashioned highway robbery. As soon as the theives guild realise that adventurers are not willing to take risks for their gear they become easy targets. This way you can rob the same adventurers again and again. If you are aware of the policy you can deliberately leave them alive so that they can claim it.

Adventuring is simply too risky for insurance to be viable, compounded by the fact that removing the risk to gear will modify the behaviour of adventurers and villains in a way that is difficult to quantify, and that adventurers are not noted for their defensive behavior.

[Kelb_Panthera]

Really though, the sociopolitical landscape of a pseudomedival setting like most D&D settings use just isn't stable enough for property insurance on the individual level to be a viable business model.

Something recognizable as insurance for large-ish trade shipments works well enough but between the high-risk nature of adventuring and the presumably low number of associated adventurers and adventuring guilds it just doesn't make sense unless you set up some sort of outside investment scheme for organized adventures.

[nedz]

Surely, before they insure a magic item they have to identify it - so that they know that it is as claimed. This has a cost (100gp) which they ought to recover.

[Zaq]

Like a good neighbor, State Farm is there!

I thought of this after I posted my Truenamer idea, so I'm glad someone else said it so I didn't have to.

Anyway, insurance. Most of the salient points have been covered already, but when has that ever stopped me before? For the purposes of this post, I'm referring to property insurance (doesn't seem right to call this "property and casualty") rather than health/life/whatever insurance (they work very differently indeed). I'm also going to be speaking very, very broadly and oversimplifying a LOT. I'm quite aware of this.

I'm also going to be working from the perspective of the insurance company acting in good faith. Yeah, I know, insurance companies are an easy target to paint with the "evil corporation" brush, but I will tell you that certain insurance companies work much, MUCH more in good faith than other ones do. I'm not saying there's NO corruption, since you're basically guaranteed some level of that in any major corporation, but not every insurance company makes screwing the customer a priority from top to bottom. I'm going to be assuming that this fantasy insurance company is actually working in good faith to make good on their promises (which includes not making promises they aren't prepared to keep) and that they aren't looking to shaft their customers. (I'm also making some basic assumptions that the party isn't going to be engaging in rampant insurance fraud.)

On a broad level, for insurance to work, you have to have a lot of people pooling their risks together, and most of those people have to have a low enough chance of needing massive payouts that your premiums collected must outweigh claims paid out (we can handwave operating costs and insurance provider profits and stuff for the purposes of this exercise). Insurance basically forces you to deal with big economies of scale—too few risks insured, and the premium necessary for actually paying out all your claims is going to be unaffordable (which of course incites fewer people to buy your policies, and as you can see, that gets bad very quickly). In a nutshell, insurance where most of your target market cannot afford the premiums isn't insurance. (Believe it or not, that's actually defined as being one of the components of how property insurance works—it must be affordable. That was actually on the test I took when I got my insurance license.) So you need to have enough people buying into your plan to bring the premium down to a manageable level but still have enough funds on hand to keep the promises you've made.

A major wrinkle (not an insurmountable one) is the concept of pure risk vs. speculative risk and then the concept of "hazards" (as defined by the insurance industry). To oversimplify pure risk vs. speculative risk, you can only insure someone against a risk that only has a chance of loss and not both a chance of loss and a chance of gain. You can insure a gold watch against being stolen, but you can't insure against losing that gold watch in a game of poker. You can insure yourself against having your stock certificates burn up in a fire, but you can't insure yourself against those stock certificates losing value if the market crashes. You can also only insure against risk, not against expected deterioration (you don't file a claim on your car insurance if your car gets old and breaks down after normal use; you can only insure against something sudden and unexpected happening); you can insure a wand against being sundered but not against it running out of charges.

Since we're mostly insuring adventurers (who generally do risky things for the hopes of rewards), this gets weird, but not quite for the reason you think. Pure risk vs. speculative risk doesn't mean that you can't be doing things that benefit you when you suffer the loss (otherwise you couldn't use auto insurance if you got in a crash on the way to work). But we do have to bring up the idea of "hazards," specifically "morale hazard" (not to be confused with "moral hazard"—yeah, they're not quite the same thing, though they're close enough to be pretty confusing. Though truth be told, since this is a post on a D&D forum and not a dissertation, they're really close to being the same damn thing). Oversimplifying again, morale hazard is an increased chance of loss as a result of an insured being careless specifically because the insured knows that the insurer will bear some or all of the costs of the loss. An example would be not caring if you locked your car because you know the insurance will replace it if someone steals it.

Now, I will remind you at this point that I'm working from the perspective that our D&D insurance company is acting in good faith and actually wants to protect its policyholders against common sources of loss (instead of just building up so many loopholes in the contract that they basically never pay out any but the most blatantly straightforward claims). Morale hazard in this case would be something like an insured adventuring party choosing to clean out a den of rust monsters without taking proper precautions (because they know that the insurance company will help repair/replace their lost gear). It would be entirely reasonable to want your insurance company to protect you against rust monsters, right? (Again, assuming good faith.) You're adventuring in an otherwise normal dungeon, a rust monster shows up out of nowhere, and suddenly your magic sword and magic armor are kaput. That's basically exactly the sort of cause of loss a magic item insurance policy should protect you against. But the insurance company is going to have a much easier time paying the claims of the adventurer who was surprised by a rust monster than the claims of the adventurer who chose to clear out the rust monster den. A D&D insurance policy with a specific exclusion for rust monsters (one of the most common sources of loss for adventurer magic items) is like a home insurance policy with a specific exclusion for fire (one of the most common sources of loss in the real world, speaking very generally)—in other words, it's really not very helpful. (Now, yes, many real-world insurance policies exclude common catastrophic losses like earthquakes near a fault line or flood damage in a flood zone, but that's an entirely different can of worms that we won't get into now.) You could build in some kind of legalistic contract that specifies that you have to take proper precautions when expecting to encounter item-damaging monsters [which isn't dissimilar from how some real policies are written], but unless you want to play Councils and Courtrooms while the party gets in a battle of technicalities with the claims adjuster, that's unlikely to actually make the game more fun, and we can't forget that this is a game that's supposed to be fun. So I foresee this sort of thing as being an area where you have to apply liberal applications of Bigby's Waving Hand to keep things running smoothly.

I figure this should go without saying, but maybe it's worth mentioning that no insurance policy will protect you against intentional acts of destruction. If you intentionally cause harm to your own belongings, the insurance company isn't going to indemnify you against that. (There are very narrow exceptions that don't matter for the purposes of the broad ideas I'm discussing.)

Speaking of causes of loss, you have to determine whether these policies protecting these items have a whitelist (only these causes of loss are covered) or a blacklist (anything BUT these causes of loss are covered) of covered causes of loss. Though, again, only do that if it's going to make the game more fun.

I guess that's what everything boils down to. I've written and deleted several other things at this point when I realized that I'm basically just saying "do whatever makes the game more fun." So let's stop looking at this from an insurance perspective and start looking at it from a game perspective. Exactly what effect do you want this to have on the game? How often do you expect the players to have to make claims against any policies they buy? You're the GM, after all, so you're not only responsible for putting the insurance in the game but also responsible for putting all the causes of loss in the game. In D&D, magic items don't suddenly break/disappear/get damaged unless the GM chooses for that to happen. (Again, if a PC chooses for it to happen, that's not insurable.) If you don't put in rust monsters and gray oozes and enemies with Improved Sunder, then the PCs aren't ever going to need to use this insurance, at which point you have to ask yourself if the game is improved by putting it in there. Do you want to put it in as a way to have an easier excuse to get PCs back up to WBL after throwing in item-destroying monsters? In that case, make the premium low enough that everyone is going to want to buy it (again, this is a fantasy universe; unless you're literally calculating the economics of the entire market, you don't actually have to collect enough premium to cover claim expenses). Do you just want the PCs to have a gold sink without planning on making them need to make claims? If so, ask yourself why that's actually improving the game. The more I think about it, from a metagame perspective, I'd be really scared as a player if a GM introduced a mechanic like this, because that seems to be an indication that the GM is planning to break your stuff. I mean, if it's just a cute worldbuilding detail, that's kind of different, but I think it really comes down to what effect you want this to have in actual play.

But yeah. If you actually want to sit down and think about alllllll the implications of property insurance in a D&D setting, we can talk about that until we turn blue in the face. But more realistically, if you're not looking to make this a cornerstone of your setting, you need to ask yourself what end results you want this to have on actual gameplay, and then you need to set it up in a way that encourages (or at least allows and doesn't discourage) those results. If you really wanted to make this a focus of your campaign (possibly with the PCs engaged in big legal struggles against a corrupt insurer), you could absolutely do that, but don't put more into it than you actually expect to get out of it.

Kind of talked myself out of my main point there, but we'll roll with it. I am large; I contain multitudes.

[Jay R]

Fraud can take on many forms. I'd insure items when going on an adventure in which items are more likely to break, and not insure on adventures where that risk seems smaller. This is called ante-selection, and makes it much harder to set fair and profitable rates.


Leaving aside the issues of fraud and setting premiums, I have no interest in the idea. Insurance is one of the mundane things I play D&D to get away from.