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In: Economics

Insurance companies a). pool risk and enable everyone to share the cost of bad outcomes, b)....

Insurance companies a). pool risk and enable everyone to share the cost of bad outcomes, b). know who will have a bad outcome, c). totally eliminate the risk of a bad outcome, d). are risk averse

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option a

Insurance companies pool risk and enable everyone to share the cost of bad outcomes,

The insurance companies take premiums per probability of the risk and provide claims to them who had bad outcomes which means taking insurance is not vanishing the bad outcome only it can fill the bad outcome by money.

Rahul Sunny answered 2 years ago
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