Question

Underwriters of property or casualty insurance policies typically do not use which of the following sources of information when deciding to accept or reject a risk?

(a) Genealogical records
(b) Credit report
(c) Motor vehicle record
(d) Loss history data

Answer 1

Underwriters of property or casualty insurance policies do not typically use genealogical records when deciding to accept or reject a risk, instead they use sources like credit reports, motor vehicle records, and loss history data.

Step-by-step explanation:

Underwriters of property or casualty insurance policies typically use various sources of information to decide whether to accept or reject a risk. These sources include credit reports, motor vehicle records, and loss history data. Genealogical records, however, are generally not used in this process as they do not provide relevant information about a person's current risk profile when it comes to insuring property or vehicles. Insurance companies face issues of classifying people into risk groups, which is further complicated by problems of imperfect information in insurance markets, such as moral hazard and adverse selection.