Donna, who is single and 30 years old, received several speeding tickets recently and was shocked by the effect they had on her auto insurance. Donna drives a 2017 Pontiac Firebird. She 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 help Donna reduce the price of her auto insurance?
A) Maintaining her liability limits at current levels
B) Raising her medical payments coverage
C) Raising her deductible from $250 to $1,000
D) Maintaining her collision coverage at current levels
E) Raising her collision coverage by $10,000

Question

Quizplus · Accepted Answer

By raising her auto insurance deductible from $250 to $1,000, Donna is assuming more financial responsibility in the event of an accident. This increased deductible reduces the insurer's risk and therefore reduces the premium. Maintaining her liability limits at current levels and collision coverage will have no impact on the premium. Raising medical payments coverage and collision coverage by $10,000 will likely increase the premium.

Donna, Who Is Single and 30 Years Old, Received Several