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Pro-Tect Insurance Company has recently been paying out more

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Pro-Tect Insurance Company has recently been paying out more [#permalink]

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Official Guide for GMAT Verbal Review, 2nd Edition

Practice Question
Question No.: 29
Page: 126
Difficulty:


Pro-Tect Insurance Company has recently been paying out more on car-theft claims than it expected. Cars with special antitheft devices or alarm systems are much less likely to be stolen than are other cars. Consequently Pro-Tect, as part of an effort to reduce its annual payouts, will offer a discount to holders of car-theft policies if their cars have anti-theft devices or alarm systems.

Which of the following, if true, provides the strongest indication that the plan is likely to achieve its goal?

(A) The decrease in the risk of car theft conferred by having a car alarm is greatest when only a few cars have such alarms.
(B) The number of policyholders who have filed a claim in the past year is higher for Pro-Tect than for other insurance companies.
(C) In one or two years, the discount that Pro-Tect is offering will amount to more than the cost of buying certain highly effective antitheft devices.
(D) Currently, Pro-Tect cannot legally raise the premiums it charges for a given amount of insurance against car theft.
(E) The amount Pro-Tect has been paying out on cartheft claims has been greater for some models of car than for others.
[Reveal] Spoiler: OA

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Originally posted by WaterFlowsUp on 09 Sep 2013, 11:06.
Last edited by GMATNinjaTwo on 18 Mar 2018, 19:10, edited 4 times in total.
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 09 Sep 2013, 11:09
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Only option that suggests that discount might get customers intersted in installaing an anti-theft decive is C for Charlie
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 18 Nov 2013, 08:09
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Pro-Tect Insurance Company has recently been paying out more on car-theft claims than it expected. Cars with special antitheft devices or alarm systems are much less likely to be stolen than are other cars. Consequently Pro-Tect, as part of an effort to reduce its annual payouts, will offer a discount to holders of car-theft policies if their cars have anti-theft devices or alarm systems.

Which of the following, if true, provides the strongest indication that the plan is likely to achieve its goal?

(A) The decrease in the risk of car theft conferred by having a car alarm is greatest when only a few cars have such alarms.
(B) The number of policyholders who have filed a claim in the past year is higher for Pro-Tect than for other insurance companies.
(C) In one or two years, the discount that Pro-Tect is offering will amount to more than the cost of buying certain highly effective anti theft devices.
(D) Currently, Pro-Tect cannot legally raise the premiums it charges for a given amount of insurance against car theft.
(E) The amount Pro-Tect has been paying out on cartheft claims has been greater for some models of car than for others.

Option C : discount > cost of anti theft device

then obviously people buy anti theft device before buying Insurance!!
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 19 Jan 2015, 14:53
Although I got my answer correct, but I pre-assumed something different than given in the answer choice. Please check whether this my pre-assumption is also correct:

In the premise, there is an assumption - Those cars having antitheft devices or alarm systems must not be already insured, that's why Pro-Tect Insurance Company wants to insure them in their latest approach. So, by saying that those cars were not insured before and is likely to get insured next, then it can be strengthened that the plan is likely to achieve its goal.

Thanks and Regards
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 22 Feb 2015, 04:23
Hi Tushar. I think your assumption is not right because we are talking about car which are insured. There is no information about cars which have antitheft devices or alarm systems are insured or are not insured.
My assumption is : Antitheft devices are affordable.
It supports the conclusion.

Option C is in line with the assumption. If I am not wrong then, Option C can also be the assumption.
I want verbal experts to judge my analysis. I am sure egmat experts and veritas experts can give great feedback for this question.
Thanks.

Respectfully,
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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tusharkhatri18 wrote:
Although I got my answer correct, but I pre-assumed something different than given in the answer choice. Please check whether this my pre-assumption is also correct:

In the premise, there is an assumption - Those cars having antitheft devices or alarm systems must not be already insured, that's why Pro-Tect Insurance Company wants to insure them in their latest approach. So, by saying that those cars were not insured before and is likely to get insured next, then it can be strengthened that the plan is likely to achieve its goal.

Thanks and Regards
Tushar


hi Tushar,

the plan as per the argument is " to reduce payouts arising due to theft of the car.., whereas as per you it is to target the uninsured cars..... if the plan were as you were thinking, your assumption could be close...
it is therefore important that the argument be read properly to correctly find inferences, assumption etc..

and what C does as an assumption is "since the cost to install anti theft devices will be cheaper than the discount being paid by the company, it is likely people will install these devices to get the discount and so the plan will work..
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 04 Jul 2015, 08:42
tusharkhatri18 wrote:
Although I got my answer correct, but I pre-assumed something different than given in the answer choice. Please check whether this my pre-assumption is also correct:

In the premise, there is an assumption - Those cars having antitheft devices or alarm systems must not be already insured, that's why Pro-Tect Insurance Company wants to insure them in their latest approach. So, by saying that those cars were not insured before and is likely to get insured next, then it can be strengthened that the plan is likely to achieve its goal.

Thanks and Regards
Tushar


Hi Tushar,

A part is the stimulus makes it very clear that the company is offering discounts for existing policy holders. It is "Consequently Pro-Tect ...........................will offer a discount to holders of car-theft policies.................." No where does it talk about prospective customers.
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 14 Apr 2016, 09:11
Conclusion: Reduce Annual pay outs.
Premise: Offer discounts if cars have ant-theft devices.

Assumption: People will install anti-theft devices to be eligible for the discounts.

Something which validates this assumption will strengthen the argument.
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 22 May 2016, 04:34
Pro-Tect Insurance Company has recently been paying out more on car-theft claims than it expected. Cars with special antitheft devices or alarm systems are much less likely to be stolen than are other cars. Consequently Pro-Tect, as part of an effort to reduce its annual payouts, will offer a discount to holders of car-theft policies if their cars have anti-theft devices or alarm systems.

Which of the following, if true, provides the strongest indication that the plan is likely to achieve its goal?

Conclusion - In order to reduce its annual payouts , Pro-Tect will offer a discount to holders of car-theft policies if their cars have anti-theft devices or alarm systems.
Will the discount offered by Pro-Tect suffice for people to have anti theft devices ?


(A) The decrease in the risk of car theft conferred by having a car alarm is greatest when only a few cars have such alarms.
Irrelevant
(B) The number of policyholders who have filed a claim in the past year is higher for Pro-Tect than for other insurance companies.
Out of Scope
(C) In one or two years, the discount that Pro-Tect is offering will amount to more than the cost of buying certain highly effective antitheft devices.
Correct Answer
(D) Currently, Pro-Tect cannot legally raise the premiums it charges for a given amount of insurance against car theft.
Out of Scope
(E) The amount Pro-Tect has been paying out on cartheft claims has been greater for some models of car than for others.
Out of Scope
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 14 Mar 2017, 14:03
premise: cars with antitheft system are less likely to be stolen than others
we need to find answer saying that the company will reduce its payouts<=less incidents<=premise that less cars with antitheft system are stolen
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 16 Aug 2017, 22:37
Correct choice is 'C' - Pro-Tect's plan will provide an effective incentive for car owners to install anti-theft devices; thus the plan is likely to achieve success.
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Re: Pro-Tect Insurance Company has recently been paying out more [#permalink]

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New post 17 Aug 2017, 14:16
Pro-Tect Insurance Company has recently been paying out more on car-theft claims than it expected. Cars with special antitheft devices or alarm systems are much less likely to be stolen than are other cars. Consequently Pro-Tect, as part of an effort to reduce its annual payouts, will offer a discount to holders of car-theft policies if their cars have anti-theft devices or alarm systems.

Which of the following, if true, provides the strongest indication that the plan is likely to achieve its goal?

(A) The decrease in the risk of car theft conferred by having a car alarm is greatest when only a few cars have such alarms.
Okay. This is a fact set. Invalid.

(B) The number of policyholders who have filed a claim in the past year is higher for Pro-Tect than for other insurance companies.
We are not worried about the number of policy holders.

(C) In one or two years, the discount that Pro-Tect is offering will amount to more than the cost of buying certain highly effective antitheft devices.
Correct. If the savings are more than the cost, then its a profit for the consumer.

(D) Currently, Pro-Tect cannot legally raise the premiums it charges for a given amount of insurance against car theft.
Irrelevant.

(E) The amount Pro-Tect has been paying out on cartheft claims has been greater for some models of car than for others.
We are not worried about the proportion of payouts being made currently.
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Re: Pro-Tect Insurance Company has recently been paying out more   [#permalink] 17 Aug 2017, 14:16
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