The no-claim bonus enables the informed driver to reveal her or his type to the uninformed insurance

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The no-claim bonus enables the informed driver to reveal her or his type to the uninformed insurance company and get insurance at a lower price, in line with the lower risk that the driver presents. A driver who makes claims also reveals her or his type to the insurance company and gets insurance at a higher price, in line with the higher risk that the driver presents.

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Foundations Of Microeconomics

ISBN: 9780134491981

8th Edition

Authors: Robin Bade, Michael Parkin

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