The maximum possible loss that can occur helps one
A)evaluate loss frequency.
B)choose insurance policy limits.
C)identify potential losses.
D)distinguish between speculative and pure risk.

Question

Quizplus · Accepted Answer

The maximum possible loss helps to determine the amount of coverage needed to adequately protect against potential losses. By choosing insurance policy limits based on the maximum possible loss, one can ensure that they are fully covered in the event of a catastrophic loss. Furthermore, identifying the maximum possible loss can also help in determining the cost-benefit analysis of purchasing insurance or taking on specific risks.

The Maximum Possible Loss That Can Occur Helps One