As a form of screoning, auto insurance companies O A use the deductible, and hig

Question

As a form of screoning, auto insurance companies O A use the deductible, and high-risk drivers choose policies with a high deductible and a low premium OB use the average of the marginal costs of providing insunce to careful drivers and to aggressive drivers to determine premium pros O C. use the no-claim bonus, which helps to lessen the moral hazard problem D. ask each driver to divulge asymmetric information about personal driving habits Click to select your answer 01/15/18 11:59pm ASSESS Chapter 17 Quiz 8 3 5

Explanation / Answer

C. use the no-claim bonus, which helps to lessen the moral hazard problem.

The policy holders are rewarded for their no-claim on the previous policies. They are given disocount on the premiums and helps to reduce moral hazard problem.

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