Many auto insurance policies have uninsured motorist


Question: Many auto insurance policies have "uninsured motorist" provisions that pay the insured if his car is involved in a hit-and-run accident or one in which the other party does not carry insurance. Here moral hazard is reversed and threatens the insured person. Explain why, and give the argument in terms of a principal/agent model.

Solution Preview :

Prepared by a verified Expert
Microeconomics: Many auto insurance policies have uninsured motorist
Reference No:- TGS02481217

Now Priced at $15 (50% Discount)

Recommended (95%)

Rated (4.7/5)