Insurance companies' attempts to minimize adverse selection and moral hazard explain which of the following insurance practices?

Question

Quizplus · Accepted Answer

Restrictive provisions in insurance policies are specifically designed to minimize adverse selection and moral hazard by limiting coverage in certain situations, thereby discouraging risky behavior and ensuring that those seeking insurance are not doing so with the intention to exploit the coverage.

Insurance Companies' Attempts to Minimize Adverse Selection and Moral Hazard