In general, people are willing to pay more than the expected value of insurance because:
A)they are risk-averse.
B)they would have trouble finding enough money to cover their losses.
C)it allows them to afford major expenses from catastrophes without going bankrupt.
D)All of these are true.

Question

Quizplus · Accepted Answer

All of these options describe reasons why individuals might be willing to pay more than the expected value for insurance, highlighting the concept of risk aversion and the desire to mitigate potential financial disasters.

In General, People Are Willing to Pay More Than the Expected