When an auto insurance company is screening,it is
A) ignoring the possibility of moral hazard in order to minimize adverse selection.
B) attempting to keep its private information private.
C) trying to determine if a driver is an aggressive driver or a safe driver.
D) making its private information public.
E) marketing its policies to customers.

Question

Quizplus · Accepted Answer

When an auto insurance company is screening, it is trying to determine if a driver is an aggressive driver or a safe driver. This helps the insurance company to assess the level of risk associated with insuring the driver and to set an appropriate premium. The other options are not relevant to the screening process.

When an Auto Insurance Company Is Screening,it Is