Answered: Why does car insurance which explicitly…

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Finance

Why does car insurance which explicitly includes ensuring the car for commercial use act to reduce moral hazard

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter10: Managing Property And Liability Risk

Section: Chapter Questions

Problem 5LTAI

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Concept explainers

Motor Vehicle Insurance

Motor vehicle insurance is a contract between the insurance company that provides insurance cover and the person who owns the vehicle. According to the terms and conditions of the insurance contract, the insurance company reimburses the policyholder for losses and damages. This insurance policy covers the financial risks of the motor vehicle owner. Electronic vehicles are also covered in a vehicle insurance policy, but the insurance rate is relatively higher than other motor vehicle insurance. Motor vehicle insurance is otherwise called an automotive insurance policy.

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