Final answer:
The Assigned risk plan is a mechanism for providing insurance to drivers who cannot obtain coverage in the standard market, addressing issues of adverse selection.
Step-by-step explanation:
The term used to describe plans in which automobile insurers participate to make insurance available to drivers unable to obtain coverage in the standard market is the Assigned risk plan. This plan is a common government intervention to ensure that high-risk drivers, who would otherwise not be able to get insurance due to adverse selection, can obtain the necessary auto insurance coverage. Adverse selection occurs when insurance companies are wary of insuring high-risk individuals, fearing that offering a standard rate to all would lead to losses, as only those expecting to file a claim would purchase coverage. Consequently, most states mandate that car owners must have auto insurance, which leads insurance companies to create an average rate for the market. However, high-risk drivers still need coverage, so the Assigned risk plan allows them to get insurance, albeit often at higher rates to reflect the increased risk they pose.