If a homeowner's fire insurance premium exceeds the probability of a total loss from fire times the value of the home, then this illustrates ____

1.the irrationality of the homeowner to pay more than the expected loss

2.people's risk aversion, causing them to pay more than the expected loss to ensure losses do not exceed the premium plus deductible

3. The risk-loving nature of people that also causes them to gamble in a casino

4. the greed of insurance companies