This article considers a zero-mean background risk that is uncorrelated with insurable losses, but is not necessarily statistically independent. In particular, the size of the background risk can vary in different insurable-loss states. We show how a prudent individual will buy either more...

We consider a competitive insurance market with adverse selection. Unlike the standard models, we assume that individuals receive the benefit of some type of potential government assistance that guarantees them a minimum level of wealth. For example, this assistance might be some type of...

Although Mossin's Theorem ("full insurance with a fair premium and less-than-full coverage with a proportional premium loading") is well known for the classes of coinsurance contracts and for deductible-insurance contracts, it has not been proven for the class of upper-limit insurance contracts....