Which of the Following Statements About Problems Arising from the Use

question 45

Multiple Choice

Which of the following statements about problems arising from the use of a coinsurance clause is (are) true?
I.The amount of insurance should be periodically evaluated to avoid a coinsurance penalty because of inflation.
II.An agreed value coverage option is one method used to solve the problem of values that fluctuate throughout the policy term.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

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Definitions:

Production Driven

Production driven refers to a business approach that prioritizes the efficiency and volume of production, often at the expense of other factors such as customer demand or innovation.

Discretionary Cost

A cost that is not essential for the operation of a business and can be adjusted or eliminated without directly impacting the immediate viability of the business.

Furniture Manufacturing

The industrial process of producing furniture items, combining various materials such as wood, metal, and textiles.

Advertising

The activity or profession of producing advertisements for commercial products or services, aimed at influencing the buying behavior of consumers.