Hurricane Insurance, again
A picture of the price of the Louisiana contract. The prices are the squares (right axis) and the bars are the volume (left axis). See the previous post for some details, but the basic idea is the price of the contract reflects the probability that the hurricane would make landfall in Louisiana and be at least category 2.
If we could find an enterprising student that would gather some data on how the “cone of error” evolved, it might be fun to put them together and so some analyzing.
If you click on the picture, a new window appears where the image is a bit more clear.
–CT
Update: I’ve added the picture for an identical contract on Hurricane Ike as of Monday night at 9:00 pm.
September 8th, 2008 at 11:35 am
Most people think they have to buy a contract for their insurance before a storm hits. However, if you own your home or rent it, a person should have some kind of contract if they think a storm is coming or not. Sometimes probability is not correct and sometimes it is. We should not gamble with our possessions. Man is more perdictable then a natural disaster. I would always buy contracts to protect my possesions. Mattie Franklin
September 8th, 2008 at 11:38 am
It is always best to be safte than not to. The amount of money that one spends yearly on an insurance policy to protect their home and to have a piece of mind is greater. The benefit of insurance outways the cost of insurance. Therefore benefit is greater in any event that a hurricane hits and you do not have insurance
Dana Brown