The primary purpose of coinsurance in property insurance is to ...

[tth]

The primary purpose of coinsurance in property insurance is to
 
  A) reduce moral hazard.
  B) achieve equity in rating.
  C) minimize problems in settling claims.
  D) eliminate small losses.

Question 2

Which of the following statements about problems arising from the use of a coinsurance clause is (are) true?
 
  I. The amount of insurance should be periodically evaluated to avoid a coinsurance penalty because of inflation.
  II. An agreed value coverage option is one method used to solve the problem of values that fluctuate throughout the policy term.
  A) I only
  B) II only
  C) both I and II
  D) neither I nor II

[Jmfn03]

Answer to Question 1

Answer: B

Answer to Question 2

Answer: C

[tth]

Excellent

[xiazhe]

TYSM