A Note on Insurance Coverage in Incomplete Markets
Southern Economic Journal, 1999, vol. 66, issue 2, pages 433-441
In this paper, “full insurance coverage on average” is defined as the coinsurance rate that eliminates all insurable risk when the uninsurable risk is evaluated at its mean. The regressibility assumption is used to derive the conditions on the correlation between background and insurable risks and the actuarial unfairness of insurance under which full, over-, or underinsurance on average is optimal. These conditions are compared to those for the case of default risk. Together, they explain intuitively the different results under the cases of background risk and default risk obtained in the literature.
References: Add references at CitEc
Citations View citations in EconPapers (4) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:sej:ancoec:v:66:2:y:1999:p:433-441
Access Statistics for this article
Southern Economic Journal is currently edited by Laura Razzolini
More articles in Southern Economic Journal from Southern Economic Association
Contact information at EDIRC.
Series data maintained by Laura Razzolini ().