Full Coverage for Minor, Recurrent Losses?

Sjur Flåm

No 10/02, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: This note looks at insurance of minor, recurrent losses. The main concern is with efficiency properties of full coverage. As motivation and running example we concider a regime, currently operative in several European countries, that offers employees complete wage reimbursement during short spell sickness. Assembled here are some arguments speaking against this sort of insurance policy.

Keywords: risk sharing; coinsurance; deductible; non-insurable risk; Pareto efficiency; mutual insurance; arbitrage; adverse selection; moral hazard. (search for similar items in EconPapers)
JEL-codes: D81 I28 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2002-04-09
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