ShankSouljaBoi wrote:
VeritasKarishma can you please explain as to why B is not correct ? Also, can we use quant for this question, since the stem mentions proportional increase ?
Regards
Let's take some numbers.
................................................................ Period 1 ('00 to '04) ............... Period 2 ('04 to '08)
Avg insurance cost ........................................ 100 .............................................120
Insurance policies/vehicle ownership.............. 0.5 .............................................. 0.5
Even with the increase in avg insurance cost, same percentage of vehicle owners bought insurance policies. If there were 1000 vehicle owners in period 1, 500 bought policies. If there were 1200 owners in period 2, 600 of them bought policies.
Conclusion: Motorists' willingness to insure their vehicles is unaffected by fluctuations in the cost of insurance.
Even though the cost of insurance has increased, still 50% motorists bought the policy.
What strengthens this conclusion:
(A) Up-to-date automobile insurance is required by law in all American states.
What law requires is irrelevant. We are talking about the willingness of motorists in the two periods.
(B) The decrease in vehicle ownership as of 2004 was negligible in most states.
Considering that we have figures in terms of insurance policies/vehicle ownership, increase or decrease in number of vehicle ownership should have no impact.
(C) Several less expensive insurance policies were introduced to the market in 2004.
Avg insurance cost has increased over the period. If several less expensive insurance policies were introduced in 2004 but avg insurance cost has still increased, apparently people are not buying lost cost policies or are buying high cost policies too. The percentage ownership of policies did not increase even though low cost policies were introduced. Then it is likely that willingness to buy policies does not depend on cost of policy. Of the given options, I would select this, if I had to.
(D) Fewer people bought automobiles between 2000 and 2004 than did after 2004.
Again, vehicle ownership in itself doesn't change anything. We know that the percentage of people getting insurance is the same. If given official answer is (D), I am not sure why. I would need to see the OE. Considering that car insurance policies are bought annually (or at least repeatedly) and number of vehicle ownership depends on how many vehicles were sold out too, I am not sure how they explain this as answer.
(E) The rate of accident-related insurance claims peaked between 2004 and 2005.
High rate of claims in 2004 and 2005 could explain the increase in insurance cost but that is irrelevant to us.