question 10 of 10\nwhich factor would most likely increase the risk of being underinsured?\n\na. having a…

question 10 of 10\nwhich factor would most likely increase the risk of being underinsured?\n\na. having a history of making claims in the past\nb. having a low limit of liability\nc. reducing the number of policy exclusions\nd. purchasing the maximum coverage

question 10 of 10\nwhich factor would most likely increase the risk of being underinsured?\n\na. having a history of making claims in the past\nb. having a low limit of liability\nc. reducing the number of policy exclusions\nd. purchasing the maximum coverage

Answer

Brief Explanations:

  • Option A: A history of past claims affects insurance premiums or eligibility but not directly the risk of being underinsured (underinsured means insufficient coverage, not related to claim history).
  • Option B: A low limit of liability means the insurance coverage amount is low. If the limit of liability is low, in case of a loss, the insurance may not cover the full amount, thus increasing the risk of being underinsured.
  • Option C: Reducing policy exclusions means more events are covered, which would decrease the risk of being underinsured as there are fewer situations where coverage is denied.
  • Option D: Purchasing maximum coverage means having the highest possible coverage, which would greatly decrease the risk of being underinsured.

Answer:

B. Having a low limit of liability