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For similar cars and drivers, automobile insurance for collision damag

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abhishekmayank

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14 Nov 2020, 07:20

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Let us look into the contenders for the answer :

(A) Repairing typical collision damage does not cost more in Greatport than in Fairmont.

(B) There are no more motorists in Greatport than in Fairmont.

I understand that option A is correct. But the option B can not be rejected because it is talking about the absolute number whereas question stem talks about the average - as pointed out in other replies. In fact, "absolute number" makes this option viable contender. An average is similar to percentage. If the average collision is less then it doesn't mean that associated absolute number is also less. So if the average number of collision in GreatPort is less, it does not mean that total number of collision in the city is fewer than in Fairmont.

As per this understanding, experts could you help me as to how the option B can be rejected. Only reason comes to my mind for its rejection is that if the absolute number of collisions of insured vehicle is more - in spite of less average - then it also means that more insurance money paid to the customer is counter balanced by more insurance premium collected, hence earning more profits.

Hi AndrewN,

Your insight is needed. Thanks in advance

AndrewN

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14 Nov 2020, 09:35

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abhishekmayank

The problem with (B), abhishekmayank, is that it makes no difference one way or the other whether there are more motorists in Greatport. An assumption is a condition that must hold for the argument to make sense. This argument, that insurance companies are making a greater profit on collision-damage insurance in Greatport than in Fairmont, could be based on the same number of motorists in each of Greatport and Fairmont, or it could be based on a different number. Your reasoning traces a could-be-true scenario when a must-be-true is needed instead. I agree with nightblade354 that (A) hinges upon the test-taker filling in the blank that insurance companies, not motorists, foot the bill to repair collision damage, but if (A) were not true, then that clearly in the conclusion is quite hard to justify.

I hope that helps. Thank you for thinking to ask me about the question.

- Andrew

mk96

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04 Feb 2021, 21:53

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HARRY113

I go with A.
Since, The argument states that:
Insurance costs = G > F and # Collisions = F > G.
Therefore author might have assumed that Collision cost are less in G. Since, there is a possibility that, the collisions cost can be higher even if the # of collisions are less. So definitely the answer should be in that terms for the authors conclusion to be true.

what bearing does the information "insurance costs are higher in G than F" have on our analysis. Insurance costs are something that the car owners would have to born right? But when it comes to profit made by insurance companies in respective regions, then angle of cost would come into play right?

Because what confuses me is that what was the need at all but the author to provide us with the "For similar cars and drivers, automobile insurance for collision damage has always cost more
in Great port than in Fairmont."

Please, someone, respond. Proper explanations and analysis is appreciated.
Thanks,
MK

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03 Nov 2022, 19:51

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nightblade354

If we changed option C to "Claim", G residents are more likely to claim than F residents. Then can we say this would be a correct answer?

nightblade354

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04 Nov 2022, 11:10

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krndatta

nightblade354

If we changed option C to "Claim", G residents are more likely to claim than F residents. Then can we say this would be a correct answer?

If this is the end result of the negation, then yes, per my initial explanation, that would be sufficient to ruin the argument.

Piscine15

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31 Aug 2023, 13:59

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I can deduce that option A is correct one only by looking at the conclusion. I want to know how the assumption is linking premise to the conclusion?

MartyMurray

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16 Sep 2023, 20:16

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Piscine15

I can deduce that option A is correct one only by looking at the conclusion. I want to know how the assumption is linking premise to the conclusion?

Here are the premises:

For similar cars and drivers, automobile insurance for collision damage has always cost more in Greatport than in Fairmont.

Police studies, however, show that cars owned by Greatport residents are, on average, slightly less likely to be involved in a collision than cars in Fairmont.

Here's the conclusion that the premises support:

Clearly, therefore, insurance companies are making a greater profit on collision-damage insurance in Greatport than in Fairmont.

We see that the premises are about the "cost," or price, of automobile insurance for collision damage and the relative frequencies of collisions in Greatport and Fairmont.

Then the conclusion is about the "profit" of insurance companies.

So, the argument assumes that the conclusion about profit is supported by the premises about cost and frequency.

The correct answer, (A) Repairing typical collision damage does not cost more in Greatport than in Fairmont, connects the premises about cost and frequency to the conclusion about profit by filling in another piece of information that we need since, for insurance companies, profit = total cost of insurance - (frequency of collisions * cost of repairing typical collision damage).

Raman109

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26 Sep 2023, 04:17

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How they make more profits. Profits = Revenue - cost. The cost of repair has to be less. That's what A says.
The option C is a strengthener (it makes us believe more in the conclusion). We are not looking here for a strengthener but for an assumption, a necessary condition.
B - the number of motorists doesn't matter out of scope.
D - Out of scope.
E - We don't care if they are already aware. Out of scope

rmahe11

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28 Jun 2024, 08:23

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nightblade354

For similar cars and drivers, automobile insurance for collision damage has always cost more in Greatport than in Fairmont. Police studies, however, show that cars owned by Greatport residents are, on average, slightly less likely to be involved in a collision than cars in Fairmont. Clearly, therefore, insurance companies are making a greater profit on collision-damage insurance in Greatport than in Fairmont.

P: For similar cars and drivers, automobile insurance for collision damage has always cost more in Greatport than in Fairmont
P: Police studies, however, show that cars owned by Greatport residents are, on average, slightly less likely to be involved in a collision than cars in Fairmont
C: Therefore, insurance companies are making a greater profit on collision-damage insurance in Greatport than in Fairmont.

Greatport insurance more expensive than Fairmont. Less car accidents in G. Therefore, insurance makes more. Well, what if the cars are more expensive? This seems like the biggest assumption made so let's try and find it below.

Which of the following is an assumption on which the argument depends?

(A) Repairing typical collision damage does ~~not~~ cost more in Greatport than in Fairmont. -- I don't like it, but it is as close as we get. If the cars don't cost more to repair, then the insurance makes more money (huge assumption made). I wish this had said "insurance companies don't pay more", but we have to deal with it. For the negation, if they do cost more, the argument is ruined.

(B) There are no more motorists in Greatport than in Fairmont. -- But we are talking about averages, so we do not care about number of vehicles.

(C) Greatport residents who have been in a collision are NOT more likely to report it to their insurance company than Fairmont residents are. -- This is reversed to a certain extent. If this were the other way around, it would be an assumption (the argument would be destroyed because the comparison wouldn't be accurate). But if they are not more likely, then the numbers are correct and the accident rates are comparable.

(D) Fairmont and Greatport are NOT the cities with the highest collision-damage insurance rates. -- OK, but who cares about the rates of collision in the country or world? We just care about the comparison between the two cities listed.

(E) The insurance companies were NOT already aware of the difference in the likelihood of collisions before the publication of the police reports. -- Who cares if they were aware? The argument isn't about motivation, but the result. And the argument believes that the result is that G makes more money than F.

Wont A strengthen the argument if we negate the sentence , Now in conclusion it is said that insurers are earning more profit in G vs F so technically wont this be a strengthener

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29 Jun 2025, 09:35

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