Probabilities of houses burning were positively correlated

Reference no: EM13190189

Why does the assumption of independence of risks matter in insurance? What would happen to premiums if the probabilities of houses burning were positively correlated? Can you think of a situation where they might be negatively correlated?

Reference no: EM13190189

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Probabilities of houses burning were positively correlated : Why does the assumption of independence of risks matter in insurance What would happen to premiums if the probabilities of houses burning were positively correlated Can you think of a situation where they might be negatively correlated

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