Buying insurance and then never making a claim:
A) is considered by economists to be irrational behavior.
B) means buying the insurance was a bad decision.
C) does not mean buying the insurance was a bad decision.
D) is a poor use of money.

Question

Quizplus · Accepted Answer

Buying insurance is a way to transfer the risk of a financial loss to an insurance company. The purpose of insurance is to provide protection and peace of mind in case a loss occurs. Even if a person does not make a claim and receives no benefit from the insurance, the possibility of a large financial loss is still there, so buying insurance can still be a good decision. It is not necessarily irrational behavior to purchase insurance and not make a claim.

Buying Insurance and Then Never Making a Claim