Author Question: The primary purpose of coinsurance in property insurance is to A) reduce moral hazard. B) ... (Read 59 times)

tth · **on:** Jul 11, 2018

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