Question

In: Economics

Property insurance policies typically exclude coverage for losses caused by war. This is because Select one:...

Property insurance policies typically exclude coverage for losses caused by war. This is because

Select one:

a. losses from war are potentially catastrophic.

b. insuring war creates an adverse selection problem.

c. none of the above

d. the courts have defined the term war broadly.

Solutions

Expert Solution

Option A is correct. Loss or damage from war are catastrophic which could bankrupt the insurance companies and hence they provide a clause of war exclusion in their policies


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