The recipients of the 2004 Witt Award were Louis Eeckhoudt, Olivier Mahul and John Moran for “Fixed Reimbursement Insurance: Basic Properties & Comparative Statics,” The Journal of Risk and Insurance, Vol. 70, no. 2 (June 2003), pp. 207-218.
In a number of settings, insurance contracts specify a fixed reimbursement in the event of a loss which is not conditioned on the size of the realized loss. In this article, we explore the theoretical properties of this form of insurance and draw comparisons with other types of insurance policies, such as those based on coinsurance and deductibles. We also examine links between our results and those from the literature on precautionary saving.