Fire insurance policies include deductibles:

A) because,when it comes to fire,most people are risk-averse.
B) because it is too expensive to fully insure something against fire.
C) to minimize moral hazard.
D) to minimize adverse selection.

Deductibles

The amount an insured person is required to pay out-of-pocket before an insurance company will cover the remaining costs.

Moral Hazard

The situation where one party is likely to take risks because the negative consequences of the risk will be borne by another party.

Fire Insurance

A type of property insurance that covers damage and losses caused by fire, providing financial protection to property owners.