EconPapers    
Economics at your fingertips  
 

A Note on Insurance Coverage in Incomplete Markets

Arthur Hau

Southern Economic Journal, 1999, vol. 66, issue 2, pages 433-441

Abstract: 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.

Date: 1999
References: Add references at CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

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 edited by Laura Razzolini

More articles in Southern Economic Journal from Southern Economic Association
Contact information at EDIRC.
Series data maintained by Laura Razzolini ().

 
Page updated 2012-01-24
Handle: RePEc:sej:ancoec:v:66:2:y:1999:p:433-441