Cover decision
Two tests side by side: the expected value on recorded rates, and whether a total loss would hurt.
The gauge
Cover costs on averagenet $-3.78
| Premium | $4.50 |
|---|---|
| Expected loss without cover | $0.72 |
| Absorption test | A total loss would hurt |
The expected value is negative on the recorded rates, but a total loss would still hurt. Cover here is bought for the tail, not for the average.
Parameters: cover.rate (checked 22 Sep 2026) · cover.lossRate.express (checked 22 Sep 2026) · cover.recovery (checked 22 Sep 2026)
How to read the result
- Read the two tests separately. They answer different questions and they are allowed to disagree.
- A positive expected value means cover pays on average across the recorded rates. It says nothing about your single parcel.
- A negative expected value with an absorption problem is the case where cover is bought for the tail rather than the average.
- Where a lane has no sample, no expected-value figure appears at all. That is a deliberate refusal, not a missing feature.
How it is put together
Expected loss is the order value multiplied by the lane loss rate and by the share that is typically not recovered. The premium is the order value multiplied by the recorded premium band. The difference is the expected gain. The second test is your own answer about whether you could absorb the whole loss.
Lane loss rates and the premium band are recorded with sample sizes and check dates, at the highest review tier.
What it cannot do
- Loss and damage rates come from buyer-reported outcomes, which under-record small losses that were never claimed.
- Recovery without cover is modelled as a share of the loss, and that share varies with how well the claim is documented.
- Cover terms exclude categories and conditions that this gauge does not read.
Parameters
This gauge carries 8 linked judging points and was last read on 26 Sep 2026. Its figures are recorded with a source type and an observation count; changes to any of them are logged in the change archive.