You own a house worth $400,000 on a river. If the river floods moderately, the house will be completely destroyed. This happens about once every 50 years. If you build a seawall, the river would have to flood heavily to destroy your house, and this only happens about once every 200 years.

What would be the annual premium to the nearest dollar for an insurance policy that offers full insurance? $ What would be the annual premium to the nearest dollar for an insurance policy that only pays 75% of the home value? $

What are your expected annual costs to the nearest dollar without a seawall with full insurance? $ What are your expected annual costs to the nearest dollar without a seawall with partial coverage?