In which of the following insurance pools would there be no subsidization?
A) Fire insurance
B) Life insurance
C) Automobile insurance
D) There would be subsidization in all of these pools.

Question

Quizplus · Accepted Answer

In insurance pools such as fire, life, and automobile insurance, there is always some level of subsidization. This occurs because lower-risk members effectively pay more relative to their risk than higher-risk members, supporting the overall risk pool and ensuring that coverage is available for those with a higher likelihood of filing a claim.

In Which of the Following Insurance Pools Would There Be