You are shopping for auto insurance and contact a particular company about their coverage. This company is offering to give you $20,000 per year in accident coverage to pay for damages to your car and...


You are shopping for auto insurance and contact a particular company about their coverage. This company is offering to give you $20,000 per year in accident coverage to pay for damages to your car and $10,000 per year to cover damages to your car from other non-accident events, such as hail damage. To simplify the problem we are only considering comprehensive insurance which covers damages to your car from an accident you caused, as well as coverage for non-accident related events.Both you and the insurance company believe that your chance of causing an accident is 0.1 and that if you are in an accident, the chance that you have damages to your car is 0.3. You and the company also know that if you are not in an accident, the chance that your car suffers damages from an event such as a hail storm is 0.1.1. If your car suffers damage, what is the chance that you were in an accident?2. Based on the information from Question 4, what is the chance that your car was not in an accident if it has not suffered any damages?



May 09, 2022
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