Johnny pays $600 for six months of automobile insurance. This payment is called the policy. True...

Johnny pays $600 for six months of automobile insurance. This payment is called the policy.

True

False

Expert Solution

Answer- False

Explanation- In automobile insurance, there is a contract between the policy holder and the insurance company. The policy holder accepts to pay the premium and the company agrees to pay for the damages as defined in the policy. A policy is thus a document that details the plans or procedures that species the coverage period, the incidents that would be covered and other guidelines framed by the company. Hence, the payment is a premium and not called as a policy.

keosha answered 2 years ago

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