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
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