An insurance company decides on the cost of a policy for a natural hazard by __________.
A. adding up the total cost of the most recent disaster of the type
B. multiplying the probability of the loss by the number of policies sold
C. averaging their probable dollar loss for all disasters that they insure
D. calculating the cost of the probable loss times the probability of that event
Answer:D
An insurance company decides on the cost of a policy for a natural hazard by __________.
A. adding up the total cost of the most recent disaster of the type B. multiplying the probability of the loss by the number of policies sold C. averaging their probable dollar loss for all disasters that they insure D. calculating the cost of the probable loss times the probability of that event