auto insurance norwell MA gordon atlantic insurance homeowners insurance norwell MA gordon atlantic life insurance norwell MA gordon atlantic boat insurance norwell ma gordon atlantic business insurance norwell ma gordon atlantic
             Auto Insurance          Home Insurance           Life Insurance           Boat Insurance      Business Insurance

    Personal Insurance Blog

    Risk Management: When Intuition Fails Us

    Posted by Gordon Atlantic Insurance

    Sat, Feb 11, 2017 @ 11:37 AM

    Appreciate your brains decisions on risk management and auto life commercial and personal from Gordon InsurancePeople often fail to appreciate what amazing machines our brains are. How many times have you wished you could do math like a calculator in your head (especially when figuring out a 22% tip on a $321.56 lunch bill split between 13 people)? Well, we shouldn’t be so quick to condemn our brains.

    It’s safe to assume you’re reading this post right now. Your brain is translating the thousands symbols you see into sounds; sounds into words, words into sentences. It’s drawing upon thousands and thousands of memorized meanings to get what I’m trying to say into your head.

    Further, you’re probably reading in a chair right now; so on top of decoding this post, your brain is also performing countless calculations to balance your hundreds of muscles so that you don’t fall to the floor as you read… God help you if you’re standing. Oh, and not to mention that your brain is also controlling the millions of cells and enzymes that regulate your breathing, feeling, and digestion …all this without you even realizing it. The amount of electrical activity in your brain would easily short-circuit your pocket calculator, and your brain can maintain that activity for about 80 years.

    So we have remarkable machines within our skulls, which usually do a pretty good job of assessing danger; we know not to shower with radios, etc. But sometimes, our brains are so active that they make mistakes and our intuition fails us. This happens commonly with risk.

    If you haven’t read our post about the math behind insurance, I suggest you read it quickly, because the probability functions behind the simple games in that post are very similar to what your brain does automatically. For every risk you take, your millions of neurons perform a cost-benefit assessment.

    Let’s say that it’s a nice day. You know that you’ll enjoy yourself outside and you also know that there’s a very small probability that you’ll get hit by a meteorite. However, your brain quickly calculate that the rewards are much greater than the risks, and you go sunbathing. Normally, this process is very effective, but our emotions sometimes distort this process and mislead our intuition.

    Think about how many times you’ve seen people drive to the beach and then refuse to swim because they’re ‘really afraid of sharks.’ This is a classic misrepresentation of risk. The chance of getting into a car crash on the way to the beach is thousands of times higher than the chance of being attacked by a shark, but it’s the shark attack that people are scared of.

    This is what psychologists would call a misrepresentative heuristic: the process that we use to calculate chances is distorted by our thoughts. Even though we have a better chance of winning the lottery than being munched on by JAWS, the fear that accompanies a shark attack leads us to assign an artificially high concern level for an event with a very low probability.

    This is also the case when talking about poisonous spiders, lightning strikes, and other things that go bump in the night. Our impulses are good things to keep in mind when fear prevents us from having fun or enjoying life.

    INSURANCE QUESTION?
    Corbin Foucart

    Tags: psychology, risk, management, insurance, intuition, shark attack, math

    Risk Assessment and Hiking

    Posted by Geoffrey Gordon

    Fri, Aug 19, 2011 @ 11:49 AM

    Protect yourself for vacation with personal from Andrew Gordon InsuranceI recently hiked a stretch of the Appalachian Trail  in Maine known as the “100 Mile Wilderness” with my two sons; and even being literally days from the office, and days from cell coverage or other reminders of “civilization,” I had an epiphany about personal risk.

    While insurance and public safety measures are important tools for reducing the effects of risk on our personal lives, it does change our everyday assessment of the risk we are all willing to bear.

    When you’re miles from any kind of help descending a trail littered with boulders, roots, and deadfall trees, every single step is deliberate and cautious. The risk of losing your footing – anywhere on the trail – carries dire consequences. A compound fracture could be life threatening; even a mild sprain could mean you have to lay off your pack with a week of food, clothing and shelter to your two companions (assuming you’re traveling with companions). 

    Back here in civilization, we go to great lengths to minimize risk to the public when they pass by or into our office. The sidewalk is repaired each spring after winter’s snowplow damage; concrete filled steel posts are anchored in the sidewalk to protect us from vehicles parked outside; we have non-slip rugs; and have moved our commercial operation to our basement to provide a conference room for customer privacy. All these are good steps for providing a safe and hopefully risk-free environment to the public. But it changes our personal assessment of risk.

    The downside of this is in how it changes some people’s perception of real risks. We talk of “risky behavior” by teens when they drink and drive, or take drugs: the only risk they may perceive is getting caught by their parents or the police and losing driving privileges. They’ve been so insulated from “the trail” that my sons and I walked on, that they risk their lives and the lives of people with them and around them when they speed down residential streets drunk and high. 

    We all make risk assessments in so many decisions; and reducing risk in all public places allows us to carry-on and focus on things important to us.  But occasionally, a walk in the woods where the environment hasn’t been safety sanitized, can be a good re-set for our perception of the world.

    Click here to read our hiking journal. If you have any questions about risk, do not hesitate to contact us here at the office.

    Learn more about personal insurance here

      INSURANCE QUESTION? Contact Us

    Geoff Gordon

    Tags: home, risk, risk assessment, risk management, intuition, hiking the appalacian trail

    Latest Posts

    Most Popular Posts

    Have a Question?