A firm may use its customers' market behavior to make infer- ences about their accident probabilities. Other things equal, those with high accident probabilities will demand more insurance than those who are less accident-prone. Although possibly accurate, this is not a profitable way of finding out about customer characteristics. In- surance companies want to know their customers' characteristics in order to decide on what terms they should offer to let them buy in- surance. Information that accrues after purchase may be used only to lock the barn after the horse has been stolen.