An automobile insurance policy with a higher premium will most likely a. no liability b. a lower liability c. a lower deductable d. a higher deductable

The option C is correct.

An automobile insurance policy with a higher premium most likely has a lower deductible.

Further Explanation:

Automobile insurance policy related to the car insurance. If any damage occurs in car, it can be set off by the insurance amount. Insurance policy is taken for the future uncertainty that may arise during the whole life of the person. Insurance policy can be taken for things and people also. Health policy is used for personal health if in future a person has faced a severe disease possible or maybe a normal accident. For meeting this type of expense, the person is already preparing with the insurance policy and meets all the expenses immediately.

Justification for the correct and incorrect

A.

No liability limit: This option is incorrect.

The liability limit is the money that insurance company will pay at the time of requirements. In certain cases, there is a limit on the liability limit. But in case of higher premiums, insurance company will compensate for the whole amount.  

B.

Lower liability limit: This option is incorrect.

The liability limit is the amount of money that the insurance company will pay at the time of requirements. In certain cases, there is a limit on the liability limit. But in case of higher premiums, the insurance company will compensate for the whole amount.  

C.

Lower deductible: This option is correct.

Deductible means the amount paid before making the insurance policy. The expenses incurred on the policy before payment of premium. The higher premium policy is taken in case a person suffering from a severe disease, in this case, a deductible is lower.  

D.

Higher deductible: This option is incorrect.

Deductible means the amount paid before making the insurance policy. The expenses incurred on the policy before payment of premium. When the deductible is higher, the premium is lower. This statement is incorrect.

Learn more:

1.Learn more about insurance

2.Learn more about life insurance

3.Learn more about insurance rules

Answer details:

Grade: Middle School

Subject: Business  

Chapter: Insurance policy

Keywords:an insurance policy, automobile insurance policy, higher premium, most likely, have, a lower deductible, no liability limit, the higher deductible, lower, future uncertainty, health policy, severe disease.

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