Car Insurance X advertises that they will pay the full cash value of a car if it
Question:
Car Insurance X advertises that they will pay the full cash value of a car if it is stolen. In contrast, most insurance companies pay back the cash value of the car less a sizable deductible. Why is it likely that relatively more cars insured by X will be stolen? Is this moral hazard or selectivity?
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The cash value of a car is based upon the average sales price of similar cars Statistically a ce...View the full answer
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