Course Solutions Uncategorized (Answered) : 7 A friend says “Insurance policies are a rip- off, they always have provisions that limit how much you can be compensated.” You e

(Answered) : 7 A friend says “Insurance policies are a rip- off, they always have provisions that limit how much you can be compensated.” You e

June 27, 2024| admin| 0 Comment| 7:45 pm

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7 A friend says “Insurance policies are a rip- off, they always have provisions that limit how much you can be compensated.” You enlighten your friend by saying …

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I will enlighten my friend by saying that those are contractual provisions and it is desirable to the one who holds the policy. They reduce the premium; reduce moral hazard, lower administrative cost of insurer, and adverse selection.

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