Insurance management tools that give policyholders incentives to avoid accidents insured against include ________.

Question

Quizplus · Accepted Answer

Deductibles require policyholders to pay a portion of the loss out of pocket, incentivizing them to avoid accidents. Risk-based premiums charge higher premiums to policyholders who pose a greater risk, incentivizing them to take safety precautions. Coinsurance requires policyholders to pay a percentage of the loss, incentivizing them to prevent losses from occurring. Therefore, all of the above options give policyholders incentives to avoid accidents.

Insurance Management Tools That Give Policyholders Incentives to Avoid Accidents