This essay has been submitted by a student. This is not an example of the work written by professional essay writers.
Uncategorized

Distinguish adverse selection from the moral hazard in the insurance market.

Pssst… we can write an original essay just for you.

Any subject. Any type of essay. We’ll even meet a 3-hour deadline.

GET YOUR PRICE

writers online

 

Distinguish adverse selection from the moral hazard in the insurance market.

 

 

 

INSURANCE

 

Insurance is financial loss protection usually involving risk management and is provided by an entity known as an underwriter, insurer or an insurance company. On the other hand of insurance is a policymaker or the insured. The insured assumes a guarantee of compensation which is promised by the insurer in exchange to a less amount payment. The compensated loss by the insurer may not necessarily be financial but should the form that is reducible to finance in terms. The insurable interest is usually established by the possession, pre-existing ownership and ownership. The insurance contract known as the insurance policy is then presented to the insured. It contains the circumstances and the conditions on which the protected will receive compensation. Some amount of money is then paid to the insurer by the policyholder. The money spent is known as the premium. In case of a loss, the insured can submit claims for processing by the insurer by a claim adjuster where the insurer might decide to hedge the risk by reinsurance.

 

 

 

 

ANSWER

 

The main distinguishment between adverse selection and moral hazard is that the adverse selection is the case where the insured manages to attain a cheaper premium service than the insurance company’s cost charges. In contrast, moral hazard is generally the scenario where one’s engagement with the insurance a riskier than not being insured.

 

Reference

Mudgett, B. D. (1961). Insurance. New York: Alexander Hamilton Institute.

  Remember! This is just a sample.

Save time and get your custom paper from our expert writers

 Get started in just 3 minutes
 Sit back relax and leave the writing to us
 Sources and citations are provided
 100% Plagiarism free
error: Content is protected !!
×
Hi, my name is Jenn 👋

In case you can’t find a sample example, our professional writers are ready to help you with writing your own paper. All you need to do is fill out a short form and submit an order

Check Out the Form
Need Help?
Dont be shy to ask