Property Insurance with Conversion Options: Upper Limits and Deductibles
AbstractThe paper compares models of insurance of real property when owners may convert damaged property to another use instead of restoring it to the pre-damage use. First it describes the optimum insurance. The main result is that the deductible and the upper limit are connected by the equation: upper limit plus deductible equals conversion point. An alternative to the full optimum is a policy having a variable upper limit and a fixed deductible. It is interesting for theoretical reasons and for descriptive reality. The comparative statics of the full optimum and the fixed-deductible alternative are essentially the same. In the fixed-deductible model, the response of the upper limit to changes in parameters is always in the same direction but of lesser magnitude than in the full optimum.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1647.
Date of creation: 01 Aug 2000
Date of revision:
Contact details of provider:
Phone: 1 212 998 3820
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.