The Role of Some Insurance Contracts in a Subjective Equilibrium Model with Observable Effect

The purpose of this article is to illustrate the incentive system due to reduce the accident probability for insured. There are many articles which were focused on that incentive system in the insurance market. But it is very difficult to understand this description because they had used some complicated mathematical techniques. Thus, the article explains that theory using not the mathematical equations but only the diagrams.The article provides a simple model. It can explain that the combination among the incentive systems can prevent not to effort for insured