Question

Rebecca is 24 years old and is involved in a automobile accident. Under her current automobile insurance, she chose a $1000 deductible. After filing her claim, the insurance company told her she had to pay the deductible before they would pay for the remaining damages.

In this scenario, what would happen if Rebecca chose to lower her deductible after completing her current claim?
A) Nothing would happen.
B) Her premiums would rise.
C) Her premiums would fall.
D) The Insurance company would drop coverage.

Answer 1

B) Her premiums would Rise

Answer 2

The answer is: B. her premiums would rise

Premium refers to the amount of money that Rebecca must pay for a certain type of coverage. When Rebecca decided to lower her deductibles the amount of expense that usually covered by the deductibles would be allocated to the premium. Because of this, the total premium that he had to pay after her current claim would increase.