Final answer:
The liability of insurers for individuals flying aircraft belonging to others depends on the specific terms of the insurance policy. Insurance operates based on pooling premiums to cover specified losses, and each policy has to account for imperfect information and varying risks.
Step-by-step explanation:
Regarding insurers' liability for individuals flying aircraft belonging to others, the correct answer is (d) Liability depends on the specific insurance policy terms. Insurance is a vital financial tool used by households and firms to mitigate the financial impact of unforeseen events. People and entities pay premiums to insurance companies, which then pool these funds to cover the losses of those insured who suffer specified adverse events.
It's important to recognize that all insurance operates with imperfect information, where the future is uncertain and the estimation of risks is complex. This is because events like air mishaps, diseases, and other accidents are unpredictable. Moreover, the risk profile of an individual, such as a pilot, may vary considerably even within a specific group, and insurance companies price their premiums based on this premise.
Therefore, while the owner of the aircraft might customarily carry insurance, the pilot may also have their own coverage, or the owner's policy might extend coverage to include other pilots operating the aircraft. Ultimately, who is covered and to what extent is determined by the specific terms of the insurance policy in question.