Insurance works because it:
A)reallocates the costs of unforeseen events, sparing any one individual from taking the full hit.
B)decreases the likelihood that any one individual will experience an unforeseen event.
C)prevents any one individual from experiencing many unforeseen events.
D)None of these are true.

Question

Quizplus · Accepted Answer

Insurance operates on the principle of risk pooling, where the costs of unforeseen events are distributed across many individuals, ensuring that no single person bears the full financial burden of an incident.

Insurance Works Because It