kevin owns a nine - year old car with a lot of miles on it that he needs to get to his job 10 miles away…

kevin owns a nine - year old car with a lot of miles on it that he needs to get to his job 10 miles away. the car is worth only about $1,000 but it costs him $200 per year to keep collision insurance on it with a $500 deductible. kevin never has more than about $500 in the bank and has no one to fall back on in an emergency. which of the following would be the best advice you could give to kevin regarding his collision insurance? a. increase his liability insurance to save some money. b. keep paying for collision insurance even though it is expensive. c. reduce the size of the deductible to cut the cost of the insurance. d. drop the collision insurance altogether to save the money.

kevin owns a nine - year old car with a lot of miles on it that he needs to get to his job 10 miles away. the car is worth only about $1,000 but it costs him $200 per year to keep collision insurance on it with a $500 deductible. kevin never has more than about $500 in the bank and has no one to fall back on in an emergency. which of the following would be the best advice you could give to kevin regarding his collision insurance? a. increase his liability insurance to save some money. b. keep paying for collision insurance even though it is expensive. c. reduce the size of the deductible to cut the cost of the insurance. d. drop the collision insurance altogether to save the money.

Answer

Brief Explanations:

Kevin's car is worth only $1,000 and he has a $500 deductible on his collision insurance which costs $200 per year. He has limited financial resources with only about $500 in the bank and no emergency support. If he has a collision, he would first pay the $500 deductible, and the car's low value means the insurance payout might not be substantial. Keeping the insurance is costly relative to the car's worth and his financial situation.

Answer:

D. Drop the collision insurance altogether to save the money.