Explain the adverse selection and moral hazard problems

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Reference no: EM131231450

Adverse Selection and Moral Hazard Problems in Insurance:

Explain the adverse selection and moral hazard problems in insurance. Gorton Insurance Company wants to properly price its auto insurance, which protects against losses due to auto accidents.

If Gorton wants to avoid the adverse selection and moral hazard problems, should it assess the behavior of insured people, uninsured people, or both groups? Explain.

Reference no: EM131231450

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