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adverse selection

noun, Insurance.
the process of singling out potential customers who are considered higher risks than the average.
Also called antiselection. Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2014.
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Contemporary definitions for adverse selection

the tendency for credit and insurance to be sought only by those who have greater than average need which thereby raises a plan's cost and reduces its benefits; also, the process of singling out high-risk customers for credit and insurance coverage; also called antiselection


Adverse selection causes higher than average costs.

Usage Note



a situation in which sellers have relevant information that buyers lack (or vice versa) about some aspect of product quality

Usage Note

business's 21st Century Lexicon
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