JAMB Commerce 2015 Paper

Concept:The cost of fire insurance is based on the level of risk the property presents to the insurer.Explanation:The insurance company assesses how likely a property is to catch fire and how severe the damage could be.The type of building materials, design, and structure directly affect this risk.A property made of highly flammable materials attracts a higher premium.A well-constructed, fire-resistant building attracts a lower premium.The owner’s identity and the property’s usefulness to the owner are not key pricing factors.The expected extent of fire damage is an outcome of the property’s structure, not the main determinant.Therefore, the major determinant is the type and structure of the property to be insured.Answer:C. Type and structure of the property to be insured.