A man with a wooden leg wanted to buy fire insurance for his leg. The first actuary quoted an annual premium of $500, estimating that the leg would burn once in 20 years and the value of the leg is $10,000.

The second actuary quoted an annual premium of $50. When the second actuary was asked how he arrived at such a small figure, he replied,

"I have this situation in the fire schedule rating table. The object is a wooden structure with an upper sprinkler, isn't it?"