Insurance companies' attempts to minimize adverse selection and moral hazard explain which of the following insurance practices?

Question

Quizplus · Accepted Answer

Insurance companies attempt to minimize adverse selection and moral hazard through various practices such as collection of information and screening of potential policyholders, risk-based premiums, and cancellation of insurance. These practices help to ensure that the policyholders are not taking undue advantage of the insurance company and are paying a fair premium based on their risk profile.

Insurance Companies' Attempts to Minimize Adverse Selection and Moral Hazard