Deductibles In Industrial Fire Insurance

Insurance contracts with multiple levels of deductibles

Insurance contracts with multiple levels of deductibles (henceforth MLD contracts) are very common. The major goal of this paper is to suggest theoretical foundations for the prevalence of this type of contracts when agents have different, not necessarily concave, utility functions that are private information. We show that an important property of such contracts is that they reduce risk in the...

Catastrophe Insurance and the Demand for Deductibles

Nonparametric bounds on the effect of deductibles in health care insurance on doctor visits - Swiss evidence.

We evaluate the effect of the size of deductibles in the basic health insurance in Switzerland on the probability of a doctor visit. We employ nonparametric bounding techniques to minimise statistical assumptions. In order to tighten the bounds we consider two further assumptions: mean independence of an instrument and monotone treatment response. Under these two assumption we are able to bound...

Sweating the Small Stu¤: Demand for Low Deductibles in Homeowners Insurance

How much do individuals pay to insure against moderate losses? To address this question I study a new homeowners-insurance data set on individual deductible choice. Even though lower deductibles require sharply higher yearly premiums, 83% of customers paid for a deductible lower than the maximum available of $1000. The prototypical homeowner paid $100 to reduce the deductible to $500, yet with ...

Evaluating Rationality in Responses to Health Insurance Cost-Sharing: Comparing Deductibles and Copayments

Many studies find that consumers reduce spending in response to higher health insurance cost-sharing, but there is mixed evidence as to whether these spending reductions reflect a rational trade-off between health benefits and costs. This paper provides new evidence on the rationality of consumer responses to cost-sharing using novel variation in two common types of cost-sharing incentives: ded...