Insurance companies charge a lower premium to drivers who carry a higher deductible because
A) insurance companies are not profit maximizers.
B) a driver's riskiness decreases as the driver's deductible increases.
C) a high deductible signals a high risk.
D) insurance companies prefer that drivers carry no deductible.
B
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What will be an ideal response?
Which of the following has NOT been a criticism of the "convergence process" for joining the Eurozone?
A) Although challenging, the process fully transforms inflation-biased nations into fiscal and monetary conservatives. B) Policies forced on applicants to monetary union are politically costly, so the interim peg may not be fully credible and may generate exchange rate crises. C) The fiscal rules are seen as inflexible and arbitrary. D) Once a nation has met the criteria, its commitment to fiscal discipline may wane.