Why does RMA allow GRIP and GRP policyholders to purchase up to a 90-percent coverage level?
The maximum coverage level available for GRIP and GRP is 90 percent, as compared to 85 percent for APH and the individual revenue products (for example, CRC, RA). As area products, GRIP and GRP are much less susceptible to fraud and abuse than are other insurance products, with the result that higher coverage levels can be offered without raising concerns about moral hazard and adverse selection. With the 90-percent coverage level, both frequency and severity of losses will be higher. However, GRIP and GRP premium rates for the 90-percent coverage level reflect the expected increase in frequency and severity.
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