In: Finance
Paige, age 26, has purchased a new Ford sedan. She has a clean driving record. Collision coverage on the car in a small Midwestern city where she lives would cost approximately $630 every six months with a $100 deductible, $566 with a $250 deductible, $492 with a $500 deductible, and $368 with a $1000 deductible. The state has a compulsory insurance law that requires minimum liability limits of #25,000/$50,000/$25,000. Paige would like to purchase collision insurance with a $100 deductible because the out-of-pocket cost to repair her car in an accident where she is a fault would be relatively small. she also would like to purchase only minimum liability limits, because she has few financial assets to protect. Paige is also concerned that she might be seriously injured by a driver who has no insurance. Assume that Paige asks your advice concerning her auto insurance coverages. Based on the above facts, answer the following questions.
d.Assume that Paige ads the uninsured motorists coverage to her policy. Would she be completely protected against the financial consequences of a bodily injury caused by an uninsured driver? Explain your answer.
e.Paige would like to reduce her auto premiums because her monthly car payments are high. Explain to Paige the various methods for reducing or holding down auto insurance premiums.
a) These are the factors that determine the auto insurance rate
1. Gender and age
2. Marital status
3. Living place
4. Credit score
5. Profession
6. Safety rating of your vehicle
7. Size of your vehicle
8. Age of the car
9. Theft rating of your car, if easy to theft means more premium
10. Driving histry of driver
11. Driving activity
12. No of claims of a particular car
b) It is better to take insurance with $ 100 deductable because your repair expense will be less in case of accident
c) Yes, if you have few financial assets to protect minimum liability limits is good option.
d) Uninsued motorist cover should be taken because you are fully free and there is no financial consequences.
e) It is better to give gigh premium and should not be compromise with insurance cover though your car premium is high. Never think for reducing car insurance premium because it is one type security and as per your driving experence you should try as per your convenient.