Which of the following insurance types typically covers risks of a poorer class than average?

High-risk insurance is designed specifically to cover individuals or entities that are considered to present a greater than average risk to insurance providers. This type of insurance typically includes clients who have previously filed numerous claims, have a history of risky behavior, or possess other factors that elevate their likelihood of needing to file a claim.

Insurers use high-risk insurance as a way to cater to those who may have difficulties securing traditional coverage due to their risk profiles. This type of insurance often comes with higher premiums or less favorable terms because of the greater likelihood of claims being made.

In contrast, standard and preferred risk insurance focus on individuals or entities that are considered to have lower-than-average risks, and adverse selection refers to the phenomenon where those at the highest risk are more likely to seek insurance, which can lead to challenges in the insurance pool. Therefore, high-risk insurance is correctly identified as the option that addresses the needs of a poorer risk class.