Asked by
austin coursey
on Oct 26, 2024
Verified
Insurance companies attempt to minimize moral hazard by imposing:
A) premiums.
B) capital at risk.
C) adverse selection.
D) deductibles.
Moral Hazard
The situation where one party to an agreement can take risks because they know they will not have to bear the full consequences of their actions.
Deductibles
Deductibles are the amounts that insured individuals must pay out of pocket for covered services before their insurance begins to pay.
Premiums
Payments made for insurance coverage or additional costs above the standard price.
- Grasp the concept of moral hazard and how it influences individual and business actions.
- Understand the use of deductibles, co-pays, and premiums in insurance to manage risk.
Verified Answer
AB
Learning Objectives
- Grasp the concept of moral hazard and how it influences individual and business actions.
- Understand the use of deductibles, co-pays, and premiums in insurance to manage risk.