How may a Commercial Package Policy (CPP) premium be adjusted?

A Commercial Package Policy (CPP) premium can be adjusted by applying a package modification factor for efficiency reasons. This adjustment is designed to encourage policyholders to combine multiple types of coverage into a single policy, which streamlines administration and underwriting processes. The package modification factor reflects the overall risk profile of the combined coverages and can lead to cost savings for the insurer, which is often passed on to the insured in the form of lower premiums.

The other options do not correctly describe how a CPP premium is adjusted. Increasing coverage limits typically raises the premium since the insurer is taking on more risk. Discounts solely for property damage coverage do not align with the comprehensive nature of CPPs, which involve various types of coverage, and limiting coverage options would not usually lower the premiums but rather reduce the protection available. Thus, adjusting a CPP premium primarily through a modification factor is an effective method related to the bundled nature of the policy.