Scott Had Trouble Obtaining Auto Insurance

question 20

Multiple Choice

Scott had trouble obtaining auto insurance.After three companies refused to insure him,he called the state insurance department.A representative suggested he obtain coverage through Last Chance Insurance Company because "that's all they insure-high-risk drivers." Scott contacted Last Chance.He was not refused coverage;however,the premium Scott was required to pay was three times greater than the average premium in the market.Last Chance Insurance Company is a(n)

• A)reinsurance facility.
• B)automobile insurance plan.
• C)specialty auto insurer.
• D)joint underwriting association.

---

Definitions:

Joint Probability

The likelihood of two events occurring simultaneously.

Independent

Not influenced or controlled by others; in statistics, refers to variables that are not related or do not affect each other.

Marginal Probability

The probability of an event occurring, disregarding all other variables or outcomes in a probability distribution.

E(XY)

The expected value of the product of two random variables X and Y, indicating their joint mean over all pairs of outcomes.