Adverse selection is
A)when people act differently because they are insured
B)when more risk averse people want to be insured more
C)when people at a greater risk want to be insured more
D)when your guess at a test question is wrong

Question

​Adverse selection is
A)​when people act differently because they are insured
B)when more risk averse people want to be insured more
C)when people at a greater risk want to be insured more
D)​when your guess at a test question is wrong

Quizplus · Accepted Answer

Adverse selection occurs when higher risk individuals are more likely to purchase insurance than lower risk individuals, leading to an imbalance in the risk pool and potentially higher premiums for everyone.

​Adverse Selection Is

Adverse Selection Is