Automobile collision insurance policies

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Reference no: EM132269208

Most automobile collision insurance policies have a deductible amount which the policy holder has to pay before the insurance company covers any collision loss. For? example, if you have a policy with a? $500 deductible provision and you have an accident with? $4000 in? damages, you have to pay the first? $500 and then the insurance company will pay the remaining? $3500. Insurance companies use deductibles

A. as a sneaky way to extract more money from policy holders.

B. to reduce the problem of shirking.

C. to reduce the problem of adverse selection.

D. to reduce the problem of moral hazard.

Reference no: EM132269208

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