8
QuizMultiple Choice

Managing Risk — Test

Question 8 • Personal Finance

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

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

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.

Previous
Next