7. (TCO 9) The basic purpose of the coinsurance provision is: (Points : 3) to re

Question

7. (TCO 9) The basic purpose of the coinsurance provision is: (Points : 3)
to reduce total losses by requiring the insured to bear a part of every loss.
to require the insured to purchase all of his or her insurance from one company.
to reduce the cost of insurance by permitting insurers to collect from the negligent party causing the loss.
to induce the insured to insure a high percentage of the value of his or her property.
none of the above.


8. (TCO 9) Jones owns a restaurant building valued at $100,000. He carries $50,000 coverage with an 80% coinsurance clause. He has a fire with damage to the building of $40,000. How much will he collect for the loss? (Points : 3)
$40,000
$32,000
$25,000
Nothing, since he has violated the coinsurance clause.
None of the above

Explanation / Answer

c) option a) option

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