The primary purpose of coinsurance in property insurance is to
A)reduce moral hazard.
B)achieve equity in rating.
C)minimize problems in settling claims.
D)eliminate small losses.

Question

Quizplus · Accepted Answer

Coinsurance is used to achieve equity in rating by requiring policyholders to insure their property to a certain percentage of its value. This ensures that policyholders pay premiums based on the proportional value of their insured property and helps prevent underinsurance.

The Primary Purpose of Coinsurance in Property Insurance Is to