The aggregate increased cost to society of operating the insurance mechanism includes all of the following except:
A)cost of operating the insurance company
B)losses due to uninsured flood losses
C)the occurrence of intentional losses to collect insurance
D)the tendency for insureds to exaggerate the amount of actual losses in the claim process

Question

Quizplus · Accepted Answer

Option A, C, and D are all factors that contribute to the increased cost of operating the insurance mechanism. However, option B states "losses due to uninsured flood losses," which suggests that these losses are not being covered by insurance and therefore not affecting the cost of operating the insurance mechanism.

The Aggregate Increased Cost to Society of Operating the Insurance