Insurance company charge for the yearly policy


A potential customer for $85,000 fire insurance policy possesses home in an area that, according to experience, may sustain the total loss in a given year with probability of .001 and a 50% loss with probability .01. Ignoring all other partial losses, what premium must the insurance company charge for the yearly policy in order to break even on all %85,000 policies in this area?

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Basic Statistics: Insurance company charge for the yearly policy
Reference No:- TGS0854339

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