Without reinsurance, insurance companies would be less likely to insure

Question

Quizplus · Accepted Answer

Without reinsurance, insurance companies would have a higher risk and higher potential payout in insuring homes in hurricane prone areas. Therefore, they may be less likely to offer coverage or charge significantly higher premiums to compensate for the risk. This is not the case for the other options listed, as the risk of accidents, fires, and burglaries are relatively similar across different locations.

Without Reinsurance, Insurance Companies Would Be Less Likely to Insure