Exposures with the potential of low frequency but high severity should generally be insured because they are

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Exposures with the potential of low frequency but high severity should generally be insured because they are

A. Highly predictable.

B. Less expensive.

C. Highly unpredictable.

D. More expensive.

Answer: C

AINS Chapter 7

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

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