Now our actuary has found the probability of each possible event happening over the year. She has
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Now our actuary has found the probability of each possible event happening over the year. She has also calculated the average damages associated with each claim in the table below. Fill in the probability of damages from Part 3A in the table!
Type of Claim | Probability of Damages | Cost of Damages |
| Fire and Lightning | 0.35% | $43,983 |
| Wind and Hail | 2.86% | $8,313 |
| Flooding and Freezing | ______ | $8,861 |
| Theft | ______ | $3,990 |
| House Fire | 0.54% | $54,208 |
| Other Damages | 0.88% | $5,048 |
For her market, she would like to charge approximately $1150 per year for her. She wants to find the average rate of return for each of her customers. First she needs to find the expected value of damagesthat is, how much the insurance provider expects to pay for each person. Use the table above to find the expected value of damages and explain your answer in the box below:
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