In the case in which all drivers buy insurance:

Name: In the case in which all drivers buy insurance:
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In this case, low-risk drivers subsidize the insurance purchases of high-risk drivers because the premiums are based on the risk level of the driver. High-risk drivers are expected to make claims more often, which means their insurance premiums are much higher. Low-risk drivers pay lower premiums, so they effectively subsidize the purchase of insurance by high-risk drivers.

In the Case in Which All Drivers Buy Insurance