Which of the Following Characterizes a Coinsurance Clause with Regard

question 63

Multiple Choice

Which of the following characterizes a coinsurance clause with regard to property insurance?

• A)It prohibits the insured from obtaining an amount of insurance which would be less than the coinsurance percentage multiplied by the fair market value of the property.
• B)It encourages the insured to be more careful in preventing losses since the insured is always at least partially at risk when a loss occurs.
• C)It permits the insured to receive an amount in excess of the policy amount when there has been a total loss and the insured carried the required coverage under the coinsurance clause.
• D)It will result in the insured sharing in partial losses when the insured has failed to carry the required coverage under the coinsurance clause.

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Definitions:

Human Resource Controls

Procedures and practices implemented in an organization to manage human resources efficiently, ensure compliance with regulations, and protect the assets of the company.

Indelible Ink

A type of ink that is permanent and cannot be removed or washed away, often used for marking important documents or election processes.

Documentation Procedures

The methods and processes used by a business to record, maintain, and manage its financial and operational information.

Segregation Of Duties

A risk management strategy where critical tasks are divided among different people to prevent fraud and errors.