What is the disadvantage of having a higher deductible?A higher deductible will lower your premium cost.The insurance company will have to pay more toward the insured loss.A higher deductible will make the cost of the repair to your vehicle cheaper. You will have to pay that amount out-of-pocket before the insurance company covers the repairs.
Question
What is the disadvantage of having a higher deductible?A higher deductible will lower your premium cost.The insurance company will have to pay more toward the insured loss.A higher deductible will make the cost of the repair to your vehicle cheaper. You will have to pay that amount out-of-pocket before the insurance company covers the repairs.
Solution
The main disadvantage of having a higher deductible is that you will have to pay more out-of-pocket costs before the insurance company starts to cover the repairs. This means that if you have an accident or need to make a claim, you will need to have enough money saved to cover the deductible. This can be a significant amount, depending on how high your deductible is.
While a higher deductible can lower your premium cost, it also increases your financial risk. If you don't have the money to cover the deductible, you may not be able to get the repairs or medical care you need.
Additionally, while the insurance company may have to pay more towards the insured loss if you have a lower deductible, this is not necessarily a disadvantage for you. It's more of a disadvantage for the insurance company.
Finally, a higher deductible does not make the cost of repair to your vehicle cheaper. It simply means you are paying more of the cost yourself, rather than the insurance company covering it.
Similar Questions
How can a high deductible affect your insurance premium?a) It increases the premium b) It decreases the premium c) It has no effect on the premium d) It guarantees full coverage without any payment
How does the make and model of your car affect how much you pay for insurance?In general, the more your car is worth the more you will pay to insure it.In general, older vehicles are more expensive to insure because repairs are needed more often.The make and model of your car has no affect on your insurance rate.In general, you can typically find cheaper insurance for a new vehicle compared to a used vehicle.
A deductible requires a person with an insurance policy to:A.return money the insurance company pays to cover major damages.B.use his or her insurance policy a maximum of two times per year.C.pay a certain amount of money before insurance will cover expenses.D.purchase all different types of insurance from the same company.
The deductible on an insurance policy refers to:A.the number of different types of insurance a policy can provide.B.the total value of an insurance policy minus its cost to the consumer.C.the money a person pays before his or her insurance covers expenses.D.the monthly fee a person pays after using insurance for the first time.
In the event of an insurance claim, if you are willing to pay a $1,000 deductible instead of $500 deductible you will pay a higher premium each month for your insurance. True False
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