Donna,who is single and 30-years-old,has received several speeding tickets recently and was shocked by the effect on her auto insurance.Donna drives a 2002 Pontiac Firebird,is currently not covered by health insurance,has an emergency fund of $25,000,an income of $100,000 per year,and an investment portfolio of $230,000.She is trying to reduce the price of her auto insurance.Which of the following actions is most likely to be advisable.
A) lower her liability limits to the minimum allowed in her state
B) drop her medical payments coverage
C) raise her deductible from $250 to $1,000
D) drop her comprehensive coverage and keep collision-only
E) drop everything from her policy except the liability insurance

Question

Quizplus · Accepted Answer

Raising Donna's deductible from $250 to $1,000 can help reduce her auto insurance premium. This means she will pay more out of pocket if she has an accident or needs to file a claim, but the savings in premium can make up for that in the long run. It is not advisable to lower liability limits or drop medical payments coverage, as these coverages protect her and her assets if she is found liable for an accident that causes injury or property damage to others. Dropping comprehensive coverage and keeping collision-only may also not be a wise choice if her car is valuable and expensive to repair. Dropping everything except for liability insurance can leave her without protection in case of theft, fire, or other non-collision related damages.

Donna,who Is Single and 30-Years-Old,has Received Several Speeding Tickets Recently