Multiple choice

The purpose of deductible clause is to:

  1. avoid claim payment

  2. eliminate payment of small claims

  3. harass the policyholder

  4. increase the premium
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The purpose of a deductible clause is to:

-eliminate small claims that are expensive to handle and process

-reduce premiums paid by the insured

-reduce moral hazard and attitudinal hazard

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