Insurance companies address adverse selection by _____ prospective clients.
A)denying coverage to many
B)charging deductibles to
C)monitoring signals of
D)charging co-pays to

Question

Quizplus · Accepted Answer

Insurance companies address adverse selection by monitoring signals of prospective clients. Adverse selection occurs when individuals with a higher likelihood of making claims are more likely to seek insurance coverage than those who are less likely to make a claim. By monitoring signals, such as age, health status, and occupation, insurers can adjust premiums or deny coverage to those who present a higher risk of making claims.

Insurance Companies Address Adverse Selection by _____ Prospective Clients