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 2004 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 the deductible from $250 to $1,000 is the most advisable option for Donna as it will lower her auto insurance premiums. Since she has an emergency fund of $25,000, she can afford to pay for the higher deductible in case of an accident. Lowering her liability limits or dropping coverage altogether can be risky as it can leave her exposed to financial liability in case of an accident. Dropping medical payments or comprehensive coverage can also be risky as it can leave her without coverage for medical expenses or damages to her car. Therefore, raising her deductible is the best option for Donna to reduce her auto insurance costs.

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