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The danger presented by any given particular person is assumed collectively by the neighborhood who all bear the value of rebuilding misplaced property and supporting folks whose wants are abruptly higher after a loss of some kind. In supportive communities the place others could be trusted to observe neighborhood leaders, this tacit form of insurance can work. In this fashion the neighborhood can even out the extreme variations in insurability that exist amongst its members. Some further justification is also supplied by invoking the moral hazard of express insurance contracts.

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