Multiple choice

In property insurance, the chances of a wooden structure catching fire are high; hence,

  1. a lower premium is required to insure wooden structure

  2. a higher premium is required to insure wooden structure

  3. high claim will be there at low premiums

  4. high claim will be there, no matter what the premium is
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In the field of property insurance, the chances of a wooden structure catching fire are more than stone structures; hence, a higher premium is required to insure the wooden structure.Risks are divided into different categories depending on the degree of risk that is present. In the given case, higher risk will lead to high premiums.

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