The Use of Deductibles and Coinsurance Are Examples of Attempts

question 25

Multiple Choice

The use of deductibles and coinsurance are examples of attempts by insurance companies to deal with the problem of

• A)moral hazard.
• B)adverse selection.
• C)failure of policyholders to keep paying their premiums.
• D)excessive government regulation.

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Definitions:

Proportioning Valve

A valve in a vehicle's brake system that modulates the pressure to the rear brakes to prevent them from locking up during braking.

Rear Wheel Lock-up

A dangerous condition where the rear wheels of a vehicle cease to rotate while in motion, often leading to loss of control.

Disc/drum System

A braking system combining both disc and drum brake technologies, typically with discs on the front wheels and drums on the rear.

Dual Circuit Hydraulic

A hydraulic system design that features two independent circuits for added safety and redundancy, often used in brake systems.