10. If Mary has a preference for a definite payment of $100 over a risky gamble that has an expected value of $100, she is Even a risk averse person may choose not to buy insurance ifthe is too high relative to the expected loss. If Rocky Road, Inc.'s shareholders all have portfolios, they may not want the firm's managers to buy insurance. The three major factors that limit insurability of risk in private insurance markets are: and ' Loss reduction activities attempt to reduce the should one occur. Wealthier individuals who find that their homeowners' liability coverage is inadequate, given their personal exposure, can insure against large liability losses through a The process of estimating the expected claim costs for insurance buyers, determining the applicable rate, and deciding whether to offer insurance coverage is known as From an economic perspective, the two fundamental objectives of the tort system are and is the body of law that has evolved over time as a result of previous court decisions and not the result of specific legislative actions. A person or firm is said to be if they have insufficient wealth to pay for damages