What is one potential consequence of the insurer assessing Andrea's rock climbing risk?

When an insurer assesses an individual's risk, such as in the case of Andrea's rock climbing activities, they take into account the potential hazards associated with that activity. Rock climbing is often viewed as a higher-risk endeavor due to the physical dangers involved. As a result, insurers may determine that they need to charge higher premiums to adequately cover the increased risk of claims. This is based on the principle of risk-based pricing, where the cost of insurance reflects the likelihood of claims being filed based on the activities and situations presented by the insured.

Higher premiums compensate for the elevated risk and ensure that the insurance policy remains viable for the insurer. This reflects a fundamental aspect of insurance, which is to manage risk effectively while maintaining financial stability. Thus, in scenarios where the risk is perceived as greater, like rock climbing, it is logical for the insurer to adjust the cost of premiums accordingly.