As an Alternative to Coinsurance,rate Discounts Can Be Given as the Amount

question 33

Multiple Choice

As an alternative to coinsurance,rate discounts can be given as the amount of insurance to value increases.This alternative is called

• A)graded rates.
• B)agreed value coverage.
• C)retrospective rating.
• D)manual rating.

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Definitions:

Depreciable Cost

The total cost of an asset that is subject to depreciation, which includes the purchase price minus any salvage value.

Useful Life

The estimated period of time over which a fixed asset is expected to be usable by the business, influencing depreciation calculations.

Depreciation Expense

The allocated cost of using a fixed asset over its useful life, reflecting its decrease in value over time.

Straight-line Method

A method for calculating depreciation of an asset, which assumes the asset will lose an equal amount of value each year over its useful life.