Which of the following would result in paying the lowest insurance premiums?

Question

a- high likelihood of loss, a low deductible
b- high likelihood of loss, no deductibles
c- low likelihood of loss, a large deductible
d- low likelihood of loss, no deductibles

Answer 1

The option that would result in paying the lowest insurance premiums is:

d- low likelihood of loss, no deductibles

When the likelihood of loss is low, the insurance company considers the risk of having to pay a claim as minimal, resulting in lower premiums. Additionally, having no deductibles means that in the case of a claim, the insurance company would be responsible for covering the full cost.