The situation where only high risk drivers buy insurance is called:

Question

Quizplus · Accepted Answer

The situation where only high risk drivers buy insurance is a case of market failure, where the insurance market is unable to provide insurance to all drivers due to adverse selection. This is because high-risk drivers are more likely to purchase insurance, driving up the cost of premiums and discouraging low-risk drivers from buying insurance. This leads to a situation where the insurance market is unable to provide insurance to all drivers at an affordable price, resulting in a market failure.

The Situation Where Only High Risk Drivers Buy Insurance Is