It may be correctly claimed that insurers usually do not pay for losses because:
A) it is the insured's money that is used to pay the claims
B) most insurers do not pay claims until the insured sues them
C) almost all claims are caused by fraud
D) insurers estimate claims actuarially in advance in order to avoid payments

Question

Quizplus · Accepted Answer

Insurers collect premiums from their policyholders and pool that money to pay for claims. When a claim is made, the money used to pay it essentially comes from the collective premiums of all the insured individuals, not directly from the insurer's own funds.

It May Be Correctly Claimed That Insurers Usually Do Not