Adverse selection is the process of making a decision without having all of the knowledge needed. It is a term commonly used in the insurance industry, when applicants withhold information from an ...

occurs in a transaction when two parties have different levels of information coverage regarding the agreement that allows one of them to gain a massive advantage in an agreement. Adverse selection ...

Key Takeaways Adverse selection happens when sick people buy health insurance more than healthy people do.The Affordable Care Act prevents insurers from refusing to sell insurance to people with ...

In an extreme case, the poor risks will be the only purchasers of coverage, and the insurer can expect to lose money on each policy sold. This situation, referred to as adverse selection, occurs when ...