Automobile insurance companies require drivers they insure have a valid drivers’ license and will not pay 100% of damage claims. Explain why.
As per guidelines of Insurance regulatory authority of nation, It is mandatory for driver to have a valid driving license with him / her while driving the car. If the driver does not have license then not only his insurance claim will be rejected but also he / she can be penalized for driving the car without license. Further, driving the car without license is not legally valid as per Motor vehicles act. Accordingly, considering the provisions of various laws, Driver must have his valid driving license before driving the car. This is the first primary condition for automobile insurance companies to check before they proceed with sanctioning of claim amount. Further, 100 % of damage claimed by person (insured) will never be paid by insurance companies because depending on the car value, insurance terms and conditions, other various parameters to consider while making claim payment.
Automobile insurance companies require drivers they insure have a valid drivers’ license and will not pay 100% of damage...
In 5 states 20% or more of drivers have no insurance, this is equal to one in eight drivers that are driving around uninsured. The accident rate would be higher if states did not require drivers to carry liability insurance. According to an article I read in insurance journal, the drivers that do not have liability insurance are putting drivers at great risk in the event of an auto accident. This study was directed by the Insurance Research Council and...
9) 15 pts. A lot of bonds are bought by insurance companies and banks. To pay off insurance claims, an insurance company might have to sell off some of its assets, including bonds. To pay off withdrawals of deposits, a bank might have to sell off some of its assets, including bonds. Banks and insurance companies are regulated by government agencies. Managers of insurance companies are punished if they cannot pay claims. Bank managers are punished if they cannot pay...
With signals from no-claim bonuses and deductibles, O A. most drivers pay higher premiums than if the market had no signals O B. the marginal cost curve for careful drivers lies to the left of the marginal cost curve for aggressive drivers O C. auto insurance companies insure more aggressive drivers than careful drivers because aggressive drivers have a greater need for the insurance O D. the market for car insurance has a separating equilibrium, and the market is efficient
7. (6pts) Adverse Selection: Consider a state in which automobile drivers are divided equally into two types of drivers: careful and reckless. The average annual auto insurance claim is $400 for a careful driver and $1,200 for a reckless driver. Suppose the state adopts an insurance system under which all drivers are placed in a common pool and allocated to insurance companies randomly. An insurance company cannot refuse coverage to any driver By law, each insurance company must charge the...
The probability distribution for damage claims paid by the Newton Automobile Insurance Company on collision insurance follows. Payment ($) Probability 0 0.82 500 0.05 1000 0.04 3000 0.04 5000 0.03 8000 0.01 10000 0.01 a. Use the expected collision payment to determine the collision insurance premium that would enable the company to break even. Answer: $ b. The insurance company charges an annual rate of $595 for the collision coverage. What is the expected value of the collision policy for...
Allstate Insurance is one of the major automobile insurance companies in the country. Recently, the western region claims manager instructed an intern in her department to test if there exists any difference between the mean years that male customers have been insured by Allstate versus female customers. The intern randomly selected 13 male and 13 female customers from the account records and the summary is given below (rounded to the nearest year). Sample Mean - Male = 12, Sample Variance...
4. (12 pts.) a. Historically, what have insurance companies done to avoid adverse selection? b. Post-ACA, is adverse selection a problem? Explain why.vn c. If you think society should insure those with pre-existing conditions, what are the realistic options in terms of types of healthcare systems? If you do not think so, explain why.
Insurance companies collect annual payments from homeowners in exchange for paying to rebuild houses that burn down. a) Why should one be reluctant to accept a $300 payment from one's neighbor to replace his house should it burn down during the coming year? b) Why can an insurance company make that offer? a) Choose the correct answer below. O A. It would be foolish to insure one's neighbor's house for $300 because although one would probably collect $300, there is...
Should insurance companies pay for Skype visits with doctors? Please give 3 reasons on why or why not and explain. Thank you!
Many insurance companies have started implementing pay structures for certain physicians, based on experience. They also provide compensation for electronic prescriptions. Discuss if you agree with this practice or not.