Maybe the kind of customers a lower minimum of contents coverage would attract are not good insurance risks. What kind of person would buy an expensive house and then fail to properly furnish it? It shows lack of planning or a declining financial situation.
On Mon, Nov 15, 2004 at 04:27:12PM -0500, Bryan Caplan wrote: > Homeowners' Insurance normally covers the contents of your home as well > as the structure. Strange feature: Your contents coverage normally have > to be AT LEAST 50% of your structure coverage. If you have 500k worth > of structure insurance, you also have to buy at least 250k of contents > coverage. Why is this? Moral hazard problems should definitely be > stronger for someone with more contents coverage. So why can't you get > a discount by cutting back? > -- > Prof. Bryan Caplan > Department of Economics George Mason University > http://www.bcaplan.com [EMAIL PROTECTED] > > "But we must deplore and, so far as possible, overcome the evils of > habitual newspaper reading. These evils are, chiefly, three: first, > the waste of much time and mental energy in reading unimportant news > and opinions, and premature, untrue, or imperfect accounts of > important matters; second, the awakening of prejudices and the > enkindling of passions through the partisan bias or commercial greed > of newspaper managers; third, the loading of the mind with cheap > literature and the development of an aversion for books and > sustained thought." > > --Delos Wilcox, "The American Newspaper" (1900)
