Which of the following could be described as a reason for the increased total cost of insurance?

Fraudulent claims significantly contribute to the overall increase in insurance costs. When individuals or entities submit false claims, it increases the burden on insurance companies to investigate and pay for claims that are not legitimate. As insurance companies incur additional costs to manage fraud detection and prevention, these expenses are often passed on to policyholders in the form of higher premiums.

Consequently, as the frequency of fraudulent claims rises, overall insurance costs escalate, necessitating higher premiums for all insured individuals. This underscores the importance of maintaining strict underwriting practices and fraud prevention measures within the insurance industry to help control costs effectively.

The other options, such as higher deductibles and premium discounts, generally lead to lower out-of-pocket costs for policyholders when claims are made or reduce the overall price in a competitive market, respectively. Increased documentation requirements can also represent an administrative burden but do not directly correlate to increased total insurance costs in the same manner as fraudulent claims do.