What is a common consequence of having a surcharge on an insurance policy?

When a surcharge is applied to an insurance policy, it typically results in increased premium costs. A surcharge is a financial penalty indicating that the policyholder has had certain claims or actions that have negatively impacted their risk profile. This could be due to traffic violations, claims history, or other factors that increase the insurer's perceived risk associated with the policyholder. Consequently, to cover this increased risk, insurance companies impose surcharges, leading to higher premium rates for the insured.

The other options do not accurately reflect the implications of a surcharge. While lowered premium rates would be contrary to the intent of a surcharge, automatic coverage for additional risks or enhanced policy benefits are not standard outcomes associated with increased charges on a policy. Instead, these concepts imply an increase in value or additional coverage, which typically would not occur alongside a surcharge situation.