Which aspect of a packaged policy is typically seen as a limitation?

The limitation of less customization in a packaged policy arises from the way these policies are designed to provide a comprehensive range of coverages under one umbrella. Packaged policies, such as those for businesses, often include a standard set of coverages that are pre-defined by the insurer. While this can provide convenience and ease of use for policyholders, it can also limit the ability to tailor coverage specifically to suit unique business needs or risks.

For example, a business in a specialized industry may find that the standard coverage included in a packaged policy does not adequately address specific risks they face, leaving potential gaps in protection. As a result, businesses might be exposed to uninsured risks or may have to purchase additional endorsements or separate policies for thorough protection.

The other options do not specifically address this limitation. Coverage depth refers to the extent of coverage provided, while higher premium costs may not necessarily apply as packaged policies can sometimes offer cost savings due to bundling. Strict underwriting criteria can vary by insurer and type of policy, but they do not fundamentally limit the customizability of the coverage options available in a packaged policy like the issue of less customization does.