Which one of the following is false concerning the standardization of insurance policies?
A) It reduces the risk for the insurance companies resulting from the principle of adhesion.
B) It holds rates below what they would otherwise be.
C) It reduces adverse selection.
D) It increases flexibility.

Question

Quizplus · Accepted Answer

Standardization of insurance policies refers to the process of making insurance policies uniform by means of adopting standard formats, policy wording, terms, and conditions. The objective of standardization is to reduce the risks for both insured and insurer, and to ensure that everyone is clear on the terms of the policy. However, standardization reduces flexibility, making it the false statement among the options given.

Which One of the Following Is False Concerning the Standardization