Identify the correct statement about deductibles and its types.
A)It requires you to carry an amount of insurance equal to a specified percentage of the value of the property if you wish to be paid the amount of loss you incur in full.
B)The low frequency and high severity nature of most direct property losses makes deductibles particularly important.
C)The straight deductible is a modification of the disappearing deductible.
D)Deductibles help maintain reasonable premiums because they eliminate administrative expenses of the low-value, common losses.
E)Because it invites moral hazard, a franchise deductible is appropriate only when the insured is able to influence or control the amount of loss.

Question

Quizplus · Accepted Answer

The Answer of Identify the correct statement about deductibles and its types.
A)It requires you to carry an amount of insurance equal to a specified percentage of the value of the property if you wish to be paid the amount of loss you incur in full.
B)The low frequency and high severity nature of most direct property losses makes deductibles particularly important.
C)The straight deductible is a modification of the disappearing deductible.
D)Deductibles help maintain reasonable premiums because they eliminate administrative expenses of the low-value, common losses.
E)Because it invites moral hazard, a franchise deductible is appropriate only when the insured is able to influence or control the amount of loss.

Identify the Correct Statement About Deductibles and Its Types