Asked by Lynette Madison on Jun 30, 2024
Verified
Which one of the following explains the effect of a co-insurance clause?
A) A co-insurance clause provides for more than one person paying the premium.
B) A co-insurance clause provides for the insurance claim to be split between two or more beneficiaries.
C) A co-insurance clause provides for the insured to assume part of the responsibility for any loss.
D) A co-insurance clause provides for several different properties being insured under the same policy.
E) A co-insurance clause provides for the insurance company arranging their own insurance on a large policy.
Co-Insurance Clause
A provision in an insurance policy that requires the policyholder to bear a portion of the risk by paying a percentage of the total claim amount.
Insurance Company
A financial institution that provides a wide range of insurance policies to protect individuals and businesses against potential loss.
Responsibility for Loss
The obligation to bear the financial or material loss suffered due to specific actions, negligence, or unforeseen events.
- Understand the doctrines that control agreements in insurance, the accumulation of claims, and the examination of indeterminate clauses to the advantage of the insured party.
Verified Answer
VL
Vanessa LaheeJul 04, 2024
Final Answer :
C
Explanation :
A co-insurance clause typically requires the insured to bear a portion of the losses, thereby sharing the risk between the insurer and the insured. This can help to lower premiums and discourage over-insurance or under-reporting of values.
Learning Objectives
- Understand the doctrines that control agreements in insurance, the accumulation of claims, and the examination of indeterminate clauses to the advantage of the insured party.