An increase in the amount of the deductible will:
A) increase the insurance coverage.
B) decrease the replacement cost of the insured property.
C) decrease the amount of insurance premiums.
D) increase the personal property floater (PPF) coverage for the insured property.
E) decrease the value of the property.

Question

Quizplus · Accepted Answer

When you increase the amount of the deductible, it means that you are increasing the amount you are willing to pay out of pocket before your insurance coverage kicks in. This means that the insurance company is taking on less risk, and as a result, they will lower your insurance premium. Therefore, an increase in the deductible will decrease the amount of insurance premiums.

An Increase in the Amount of the Deductible Will