Karla has an older car worth about $9,000. She thinks she is paying too much for auto insurance and wants to find out how she can save money. She decides to look into raising the deductible of the insurance policy from $250, which she currently has, to $1,000. If she does this, she can save $500 per year on the premiums she pays.

1.) What are the advantages/disadvantages of raising the deductible from $250 to $1,000?

2. Instead of raising the deductible, what if Karla drops the collision component of her policy and just retains liability insurance? Is this a good idea or not?