Because of the problem of adverse selection,
A) low-risk individuals may have a hard time finding insurance worth buying.
B) high-risk individuals may have a hard time finding insurance worth buying.
C) everyone is typically charged a lower premium.
D) individuals who buy insurance act more recklessly.

Question

Quizplus · Accepted Answer

Adverse selection occurs when insurers cannot differentiate between high-risk and low-risk individuals, leading to higher premiums that may deter low-risk individuals from purchasing insurance.

Because of the Problem of Adverse Selection