Study guides, Class notes & Summaries

What are some examples of adverse selection and how can commercial underwriters minimize the effects of it? 1.3 - answer-1. Business owners in areas prone to coastal storms purchase windstorm coverage or increase their limits only before hurricane season—when they expect severe losses. 2. A disproportionate percentage of business owners in an earthquake-prone zone purchase earthquake insurance, compared with other business owners. **Underwriters minimize the effects of adverse selection b...