Disadvantages of automobile insurance plans include which of the following?
I.High premiums may cause many high-risk drivers to go uninsured.
II.Large underwriting profits have resulted in high-risk drivers subsidizing the cost of insurance for good drivers in the voluntary markets.
A)I only
B)II only
C)both I and II
D)neither I nor II

Question

Quizplus · Accepted Answer

High premiums can indeed deter high-risk drivers from purchasing insurance, leading to a higher number of uninsured drivers. However, the statement about large underwriting profits resulting in high-risk drivers subsidizing good drivers is inaccurate. Typically, high-risk drivers pay higher premiums to cover their greater risk, not to subsidize lower-risk drivers.

Disadvantages of Automobile Insurance Plans Include Which of the Following