As a result of frequent flooding, the insurance market has noted a positive correlation between flooding and the amount of insurance monies paid out for such floods. Moreover, the probability of such flooding has been increasing. As a result, homeowners in flood plains will find flood insurance:
A) easy to acquire and relatively inexpensive.
B) very costly and relatively difficult to find.
C) premiums have not changed, since the insurance continues to offer the same coverage.
D) relatively expensive but easy to acquire.

Question

Quizplus · Accepted Answer

As the probability of flooding increases, insurance companies perceive a higher risk, leading to higher premiums and potentially more restrictive policies, making flood insurance costly and difficult to find.

As a Result of Frequent Flooding, the Insurance Market Has