CASE APPLICATION Paige, age 26, has purchased a new Ford sedan. She has a clean driving record. Collision coverage on the new Ford sedan. She a Paige wants to know why auto insurance costs so car in a small midwestern city where she lives would much. Explain to her the factors that determine cost approximately $630 every six months with a $100 auto insurance rates. deductible, $566 with a $250 deductible, $492 with a b. Do you recommend that Paige purchase collision $500 deductible, and $368 with a $1000 deductible. insurance with a $100 deductible? Explain your answer. The state has a compulsory insurance law that requires c. Do you agree with Paige that only minimum liabil- minimum liability limits of $25,000/$50,000/$25,000. ity limits should be purchased because she has few Paige would like to purchase collision insurance with financial assets to protect? Explain your answer. a $100 deductible because the out-of-pocket cost to d. Assume that Paige adds uninsured motorists repair her car in an accident where she is at fault would coverage to her policy. Would she be completely be relatively small. She wants to purchase the minimum protected against the financial consequences of liability limits, because she has few financial assets to a bodily injury caused by an uninsured driver? protect. Paige is also concerned that she might be seri Explain your answer. e. Paige would like to reduce her auto premiums ously injured by a driver who has no insurance. because her monthly car payments are high. Assume that Paige asks your advice concerning Explain to Paige the various methods for reducing her auto insurance coverages. Based on the above facts, or holding down auto insurance premiums. answer the following questions. tim must ahtain a judgment