Because many private insurers are reluctant to provide coverage in high-risk areas, some states have created ______ _______, which offer subsized coverage to high-risk properties and impose additional fees on all insurance contracts in the state to cover the losses of a major disaster.

Question

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The term "insurance pools" refers to a government-created program that pools together high-risk policies for properties that private insurers are reluctant to cover. The program provides subsidized coverage to these high-risk properties and imposes additional fees on all insurance contracts in the state to cover the losses of a major disaster. This type of program is also referred to as a "joint underwriting association" or a "residual market."

Because Many Private Insurers Are Reluctant to Provide Coverage in High-Risk