Multiple Choice
Suppose an insurance company wishes to separate out drivers based on whether they are high-risk or low-risk drivers. It can do this by offering two different pricing schemes: one the appeals to low-risk drivers and another that appeals to high risk drivers. Which of the following pricing schemes would best appeal to a high-risk driver? NB: a deductable is the amount that the driver would have to pay in the event of a claim:
A) a high premium but low deductable
B) a low premium and high deductable
C) a high premium and high deductible
D) None, high risk drivers prefer not to take out insurance.
Correct Answer:
Verified
Related Questions