11
QuizMultiple Choice

Auto Insurance

Question 11 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

In auto insurance, a higher deductible means the customer _____.

Answer
A
has a higher monthly bill, but pays less out of pocket in the event of an accident.
B
has a lower monthly bill, but pays more out of pocket in the event of an accident.
C
has a higher monthly bill and pays more out of pocket in the event of an accident.
D
has a lower monthly bill and pays less out of pocket in the event of an accident.

Explanation

A deductible is the amount the customer pays toward a covered claim before insurance pays. Choosing a higher deductible usually lowers the monthly premium, but means the customer must pay more out of pocket after an accident. Therefore, the correct choice is “has a lower monthly bill, but pays more out of pocket in the event of an accident.”

AI-written and checked against the verified answer.

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