JKL Insurance Company estimates that 14 out of every 100 homeowners it insures will file a claim each year. Last year, JKL insured 200 homeowners
According to the law of large numbers, what should happen if JKL insures 2,000 homeowners this year?
A) The total number of claims filed by JKL policyowners should decrease.
B) The total dollar value of claims will decrease.
C) The average size of loss will decline in value.
D) The actual results will more closely approach the expected results.
Answer: D
You might also like to view...
Most Statutes of Frauds permit lease contracts that last for less than five years to be orally contracted
Indicate whether the statement is true or false
The adequate protection doctrine protects secured creditors from losing their security as a result of the automatic stay.
Answer the following statement true (T) or false (F)
An agent's authority to act in an emergency is a type of
a. express authority. b. apparent authority. c. implied authority. d. oral authority.
All of the following are covered autos under the liability section of the PAP EXCEPT
A) a nonowned van which is driven by the insured on a regular basis. B) a trailer owned by the named insured. C) a borrowed auto used by the insured as a substitute for a stolen covered auto. D) a newly acquired auto which replaces a vehicle previously described in the policy.