Bonnie regularly lets her boyfriend drive her car whenever they go on a date. Yesterday, he caused an accident driving Bonnie’s car. Will Bonnie’s insurance company cover the accident? a. No, because insurance is always waived when a car is used by a unlisted driver. b. Yes, because PAP coverage follows the car. c. No, because her insurance company will claim that the boyfriend should have been listed as a regular driver of the car. D.Yes, because Bonnie was present when the accident happened.

Bonnie regularly lets her boyfriend drive her car whenever they go on a date. Yesterday, he caused an accident driving Bonnie’s car. Will Bonnie’s insurance company cover the accident? a. No, because insurance is always waived when a car is used by a unlisted driver. b. Yes, because PAP coverage follows the car. c. No, because her insurance company will claim that the boyfriend should have been listed as a regular driver of the car. D.Yes, because Bonnie was present when the accident happened.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter16: Information, Risk, And Insurance

Section: Chapter Questions

Problem 17RQ: How might adverse selection make it difficult for an insurance market to operate?

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