Question

question 6 of 10
the risk of being underinsured increases the most when a policy has:
a. a high limit of liability.
b. multiple exclusions.
c. maximum coverage.
d. a high deductible.

Explanation:

To determine when the risk of being underinsured increases most, we analyze each option:

• Option A: A high limit of liability means more coverage, so it reduces the risk of being underinsured.
• Option B: Multiple exclusions mean certain risks aren't covered, but it doesn't directly relate to the extent of coverage in the way a high deductible does.
• Option C: Maximum coverage means extensive protection, so it lowers the risk of being underinsured.
• Option D: A high deductible means the policyholder pays more out - of - pocket before insurance kicks in. If a claim occurs, the policyholder may not have enough coverage (in practical terms, as they have to cover a large amount themselves) or may find that the insurance doesn't cover enough of the loss relative to their financial situation, thus increasing the risk of being underinsured.

Answer:

D. a high deductible.