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Large loss: The dimensions of the loss must be significant from the angle of the insured. Insurance coverage premiums must cover each the expected value of losses, plus the cost of issuing and administering the coverage, adjusting losses, and supplying the capital wanted to moderately guarantee that the insurer will be capable of pay claims. For small losses, these latter costs could also be a number of instances the dimensions of the expected price of losses. There is hardly any point in paying such costs until the protection provided has real worth to a buyer.