Let

p: per-unit price of insurance, : probability of accident, L: loss wealth from the accident X: amount of purchased insurance.

An insurance purchaser is an expected utility maximiser. The insurance is unfair in favour of the insurance company; that is, the per-unit premium is higher than the probability of insurance payout, p > .

The insurance model suggests that risk-averse consumers choose to be fully insured, i.e, X = L.

IS THIS SENTENCE TRUE OR FALSE JUSTIFY YOUR ANWSER.