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- W1988522024 abstract "I present a two-period asymmetric learning model to study accident forgiveness as an optional insurance policy in the automobile insurance contract. Accident forgiveness, often considered as “premium insurance,” protects the insured against a premium increase if an at-fault accident occurs. By offering this feature to all policyholders at the beginning, I design an accident forgiveness policy that charges policyholders higher-than-market premiums based on their risk types in the first period and then experience rates both types in the second period contingent on their previous at-fault accidents. In this model, experience rating still serves as the sorting device although its effectiveness is tempered by the presence of an accident forgiveness policy. Moreover, I find that both individual time and risk preferences contribute to the accident forgiveness purchases." @default.
- W1988522024 created "2016-06-24" @default.
- W1988522024 creator A5033073898 @default.
- W1988522024 date "2015-02-25" @default.
- W1988522024 modified "2023-09-30" @default.
- W1988522024 title "Accident Forgiveness in the Automobile Insurance Contract" @default.
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- W1988522024 doi "https://doi.org/10.5539/ijef.v7n3p68" @default.
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