If the proportion of high risk drivers is too high, then:
A)only low risk drivers will buy insurance.
B)both high and low risk drivers will buy insurance.
C)only high risk drivers will buy insurance.
D)no one will buy insurance.

Question

Quizplus · Accepted Answer

If the proportion of high risk drivers is too high, then insurance companies may increase premiums to account for the added risk. Low risk drivers may choose to forego insurance and take their chances on the road. On the other hand, high risk drivers may be more willing to pay the increased premiums, leaving only them in the insured pool.

If the Proportion of High Risk Drivers Is Too High