Final answer:
The question involves discussing the challenges insurance companies face in collecting comprehensive information about an individual's health history or driving habits, which can be more accurately known by the individual themselves.
Step-by-step explanation:
Individuals looking to purchase insurance such as life insurance are typically more aware of their own health history and potential risks than what an insurer can find out through their own investigations. Similarly, an individual applying for car insurance might know that they are a high-risk driver, even if they have not experienced a major accident.
Insurance companies face challenges in collecting comprehensive information about personal health histories or the actual driving habits of their clients, leading to a gap in what is known to the insured and what can be assessed by the insurer. Understanding this can be crucial in insurance discussions with a parent.