Question

An insured is applying for a casualty insurance policy. One of the conditions of the policy allows the insurance company to inspect the insured's books at the end of the policy term to make sure sufficient premium has been collected for the exposure she plans to insure. Which condition is part of the insured's policy?

A. Coinsurance clause
B. Inspection clause
C. Subrogation clause
D. Deductible clause

Answer 1

The condition of the insured's policy that allows the insurance company to inspect the insured's books at the end of the policy term to ensure sufficient premium has been collected for the exposure she plans to insure is the Inspection clause.

Step-by-step explanation:

The condition of the insured's policy that allows the insurance company to inspect the insured's books at the end of the policy term to ensure sufficient premium has been collected for the exposure she plans to insure is the Inspection clause.

The Inspection clause gives the insurance company the right to examine the insured's financial records and determine if the premium collected is in line with the risk being insured. This is done to prevent underpayment of premiums and ensure that the policyholder is adequately covered.