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Refundable deductible insurance

Author

Listed:
  • Maria Mercè Claramunt

    (UB - Universitat de Barcelona)

  • Maite Màrmol

Abstract

Most insurance policies include a deductible, so that a part of the claim is assumed by the insured. In order to get a full coverage of the claim, the insured has two options: hire a Zero Deductible Insurance or take out an insurance policy with deductible and, simultaneously, a Refundable Deductible Insurance. The objective of this paper is to analyze these two options, comparing the premium paid. We define dif (F) as the difference between the premiums paid. This function depends on the parameters of the deductible applied, and we focus our attention on the sign of this difference and the calculation of the optimal deductible, that is, the values of the parameters of the deductible that allows us to obtain the greatest reduction in the global premium.

Suggested Citation

  • Maria Mercè Claramunt & Maite Màrmol, 2020. "Refundable deductible insurance," Working Papers hal-02909299, HAL.
    • Handle: RePEc:hal:wpaper:hal-02909299
    Note: View the original document on HAL open archive server: https://hal.science/hal-02909299
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    References listed on IDEAS

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    Keywords

    premium calculation; variance criterion; optimization;
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