Part a Liability Coverage Under a Personal Automobile Policy May

question 33

Multiple Choice

Part A liability coverage under a personal automobile policy may be viewed as "following":

• A)the insured.
• B)the family members of the insured.
• C)the holder of an auto loan.
• D)the vehicle.
• E)anyone involved in the accident.

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Definitions:

Signaling

A solution to the problem of adverse selection that describes an informed party’s effort to communicate her type, risk, or value to less informed parties by her actions. A successful signal is one that bad types won’t mimic. Any successful signal can also be used as a screen.

Anticipate Adverse Selection

The practice of predicting and mitigating the likelihood of selecting undesirable risks due to information asymmetry.

Secure Neighborhood

An area or community designed or protected in a way that minimizes the risk of crime, providing a safe environment for its residents.

Insurance

A financial product sold by insurance companies to protect individuals and businesses against potential future losses in return for a premium.