Question

Which of the following best describes how auto insurance companies manage risk?

A.High-risk drivers are not able to sign up for insurance
B.The insurance company balances low-risk drivers with high-risk drivers
C.The insurance company charges higher rates to higher-risk drivers
D.Both B & C
E.All of the above

Answer 1

Answer: D

auto insurance companies manage risk by charging higher insurance rates to those high risk customers to avoid any risks. It also will balance those high risk customers with low risk ones to maintain a balance.