Which policy type is designed to cover both property and liability in a single contract, aimed at reducing underwriting expenses?

• A. Monocline policy
• B. Valid policy
• C. Combination policy
• D. Package policy

Answer: (D)

A package policy bundles property and liability coverages into one contract, allowing multiple lines of insurance to be written together under a single policy form, declarations, and premium. This consolidation reduces underwriting and administrative costs for the insurer, since fewer separate policies need to be evaluated and issued. For the insured, it simplifies coverage management and often provides a cohesive set of protections with coordinated limits and terms. In contrast, a monoline policy covers only one line of coverage, such as either property or liability, not both, which is why it doesn’t fit the description. Terms like “valid policy” or “combination policy” aren’t standard descriptions for this approach, so the package policy is the correct fit.