2
QuizMultiple Choice

Insurance and Risk — Test

Question 2 • Personal Finance

A driver chooses a high deductible and low premium. What is the tradeoff?

Answer
A
higher monthly costs
B
more out-of-pocket cost during claims
C
no financial impact Correct answer: c
D
lower risk overall

Explanation

A deductible is the amount the driver must pay before insurance covers the rest of a claim. Choosing a higher deductible usually lowers the premium, but it means the driver pays more out of pocket when making a claim. So the tradeoff is more out-of-pocket cost during claims.

AI-written and checked against the verified answer.

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