When an Auto Insurance Policy Compensates the Owners of Stolen or Burglarized Cars

Question: When an auto insurance policy compensates the owners of stolen or burglarized cars for not only any physical damage to their vehicles, but also the loss of property that had been present within, victims claim nearly three times the material losses that they do when an insurer compensates only for physical damage. Because the evidence in these cases has, by definition, been stolen, there are few objective means to determine whether the victim actually incurred the material losses claimed. But these facts do not establish the conclusion most frequently drawn: that these claimed losses are generally fraudulent. Clearly, when an insurance policy does not provide compensation for items stolen from a car, people have little incentive to report such a loss.

In the argument above, the two boldfaced portions play which of the following roles?

1. The first is a claim that the argument disputes; the second is a conclusion that has been based on that claim
2. The first is a claim that has been used to support a conclusion that the argument accepts; the second is that conclusion.
3. The first is evidence that has been used to support a conclusion for which the argument provides further evidence; the second is the main conclusion of the argument.
4. The first is a finding whose implications are at issue in the argument; the second is a claim presented in order to argue against deriving certain implications from that finding.
5. The first is a finding whose accuracy is evaluated in the argument; the second is evidence presented to establish that the finding is accurate.

”When an auto insurance policy compensates the owners of stolen or burglarized cars” – is a GMAT critical reasoning topic. This GMAT Critical Reasoning topic has been taken from the book ‘ Manhattan prep GMAT Critical Reasoning 6th Edition’. In this particular topic, candidates are asked to select the option that makes the same error as the author. In this question, the candidates need to provide an option that supports the error provided in the passage. GMAT critical reasoning tests the logical and analytical skills of the candidates. Critical reasoning in GMAT requires candidates to find the argument's strengths and weaknesses or the logical flaw in the argument.  The GMAT CR section contains 10 -13 GMAT critical reasoning questions out of 36 GMAT verbal questions.

Answer: E
Explanation: This is a GMAT critical reasoning question. An assumption is an implied hypothesis. So we are looking for something that is implied in the argument. Accordingly, all the options need to be assessed and evaluated to find the one option which supports the argument. 

Option A: Incorrect 

Here, option A states that the first is a claim that the argument disputes and the second is the conclusion. However, the question asks to determine the role played by the two boldfaced portions. Accordingly, the first bold statement is a finding about the insurance policy of stolen items and the second one is an evidence that states that the finding is accurate. But Option A considers the first bold stattment to be a disputed argument for which the second statement provides a conclusion. Hence, this is incorrect 

Option B: Incorrect 

In this case Option B states that the first is a claim that has been used to support a conclusion and the second bold statement is the conclusion. However, the first is basically an argument and not a claim while the second bodface is a supporting evidence to the argument. Hence, Option B is incorrect.  

Option C: Incorrect 

Here, Option C states that first boldface is an evidence that has been used to support the conclusion however, it is an argument. The second boldface is stated to be the conclusion which is basically the evidence that is here to support the argument. Hence, Option C is incorrect.

Option D: Incorrect 

Here, Option D is incorrect because it states that first boldface is a finding the implications of which are an issue of the argument which is wrong. Rather, it is the reverse case as the stated first boldface is a finding and not an argument issue. Option D further states that the second boldface is presented as a claim to derive implications against the finding which again is wrong as it provides evidence to the first claim. Hence, Option D is incorrect. 

Option E: Correct 

Here, Option E is correct because the first boldface is a finding the accuracy of which has been stated with the non-bold statements. The second boldface is the evidence that establishes that the finding is accurate in this case. Hence, Option E is correct. The first boldface states about how the insurance company provides compensation for stolen items or loss of property for which victims claim thre times of the losses incurred. The none bolded parts of the argument effectively provided explanations for why when insurance company compensates stolen items. Sometimes even though people lie, and have no evidence. It evaluates the facts of the provided evidence. It further adds that it does not establish the conclusion most frequently drawn that these declarations of losses are generally deceitful. However. the second boldface clearly provides evidence that the insurance company does not provide compensation for items stolen from a car for which victims have little incentives for such a loss. 

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