If global warming began to cause random world-wide damage to crops,insurance companies
A) would insure against specific crop failures.
B) would not insure against specific crop failures.
C) would be indifferent between insuring or not.
D) would find themselves facing prosecution for ignoring the problem for so long.

Question

Quizplus · Accepted Answer

Insurance companies typically avoid insuring against widespread and highly correlated risks because it's difficult to diversify these risks and manage potential losses. Random worldwide damage to crops due to global warming represents such a risk, making it unlikely that insurers would offer coverage for specific crop failures.

If Global Warming Began to Cause Random World-Wide Damage to Crops,insurance