Q&A: On the obligation to inform the public about a pitfall
On the obligation to inform the public about a pitfall
Question
Hi Michi,
This time I’m turning to you more or less “as to a rabbi.”
A few months ago, representatives of a company called “Super Electric,” which deals in insurance for household electrical equipment, called me and offered to insure various items.
Luckily, I have very few such items, and I insured only 3.
The thing is that the deal was offered to me over the phone, and like many people of my generation [those who weren’t involved in commerce], I didn’t handle it properly. I listened to the offer; the basis of the offer was the cost of ordering and employing a technician to repair the product, and since that sounded reasonable to me, I was tempted by it.
In the first two months I wasn’t all that aware of the charges on my credit card for this insurance, but then the penny dropped and I realized that for the amount of the insurance on my computer, I could buy 4 computers!
I’m now trying to cancel the deal without paying, as is customary, the penalty for not canceling it within the usual 14 days, and I’m trying to appeal to the people at Super Electric to take my situation into account [which really is desperate!]. And to be honest, I have a strong card — I can “threaten” them that if they don’t come toward me, then I’ll post on social media advice about insurance for people of the third age, and tell everyone:
First of all, one should consider the price of the item in question, so that you don’t end up in a situation where the total insurance cost is several times the price of the product itself.
After I formulated this for myself, another question came to mind: since the deal I’m proposing — that is, withdrawing the threat of publishing considerations of the economic viability of insurance to the general public — is [to my taste] “kosher but stinks,” because social fairness obligates me to publish the information about the economic caveats of insurance to the broader public in order to prevent many people from stumbling into this deal.
But then I’d be throwing away a very strong card.
So I have 2 questions about this:
How should I act from a halakhic standpoint, and is there a gap between the halakhic position and the purely social position on this issue?
Goodbye and all the best
Answer
Hello A.,
I don’t really understand. It seems to me that according to the law you can cancel any insurance at any point in time, and it has nothing to do with 14 days. Fourteen days were said regarding a transaction in which you bought something, and if you return it then the seller is stuck with used merchandise. That is cancellation of a transaction. But with insurance we are not talking about cancellation but about termination. After all, with insurance you always pay in advance for the period of coverage. For example, suppose you took out insurance for a year; then at the beginning of January you pay for January’s insurance, and so on. Therefore, whenever you stop the arrangement, it’s not a cancellation but a termination from that point onward, and so in my layman’s opinion there is no legal impediment whatsoever to doing so. I’m copying my wife, may she live and be well, who is a lawyer. If she has comments, I’ll try to pass them on to you.
If you told them that you want to cancel and they didn’t agree and lied to you that it’s impossible, it seems to me that maybe you could even sue them for the past payments. But again, advice is needed, and the question is whether the damage is worth the headache.
Indeed, morally and socially it is proper to publicize this widely. But I have to tell you that many people wiser and more learned than we are have already written this, and I don’t think your clarification will change much. At most, write it in those places where you think people will read it and draw lessons. By the way, precisely for that reason I’m fairly convinced that nobody there will get excited by your threat.
As an aside, I’ll add that I usually think it doesn’t make sense to insure against an event I can absorb financially, because the expected value of insurance is always negative (that’s what insurance companies live on). So it makes sense to get third-party car insurance (because maybe you’ll crash into a brand-new Mercedes and won’t be able to cover the damage), but it isn’t worthwhile to get comprehensive insurance on your own car, because at worst it will be totaled. On average, over the years, you lose on insurance policies (because that is exactly the profit of the insurance companies).