Deductible Affect Insurance Case Study

1. What is a deductible? How does a deductible affect insurance?

A deductible is how much money you have to pay out of pocket before your insurance will pay for the rest. Let's say you total your car, your insurance may ask that you pay off 1,000$ worth of the damages before they pay. Though there is no universal amount that you have to pay, it fluctuates with what insurance you have. It typically fluctuates on how expensive the insurance is. If you have a more expensive insurance the deductible will usually be lower, rather than higher like someone with a lower expense insurance. Even if you have a high deductible you are still able to negotiate with the insurance company to get a lower deductible.

2. What is risk classification?

A risk classification is how much risk you are in when you buy insurance. For example if you were to buy health insurance, but you have a heart condition your insurance will cost a lot more. The insurance company can determine this in many different ways, for health insurance you will typically take a physical before you get insured. Another situation where risk comes to play in insurance would be car

A property risk is something that happens to your property. A liability risk is if something happens to you but it is not your fault. An example of personal risk is if you are an athlete and that is how you make your living it would be wise to incer the body part you use the most just in case you injure that part. If you are a runner you will likely incur your legs so if you break them and can no longer run you will get them paid for because you can no longer run. An example of property insurance is if something like an earthquake were to happen you will be insured in the event that your house falls apart. An example of liability risk is if you are driving you car on the street and you get hit by a drunk driver or something where it is not your fault but there is damage