Many insurance policies carry a deductible provision that states how much of a claim a person must pay out of pocket before the insurance company pays the remaining of the expenses. For example, if someone files a claim for $350 on a policy with a $200 deductible, he or she pays $200 and the insurance company pays $150. In the following cases, determine how much a person would pay with and without an insurance policy. Complete parts (a) through (d) below.

a. A person has a car insurance policy with a

$800

deductible provision (per claim) for collisions. During a two-year period, the person files claims for

$560

and

$950.

The annual premium for the policy is

$560.

With the insurance policy, the person would pay

$nothing.

Without the insurance policy, the person would pay

$nothing.

(Type whole numbers.)

b. A person has a car insurance policy with a

$300

deductible provision (per claim) for collisions. During a two-year period, the person files claims for

$560

and

$1350.

The annual premium for the policy is

$770.

With the insurance policy, the person would pay

$nothing.

Without the insurance policy, the person would pay

$nothing.

(Type whole numbers.)

c. A person has a car insurance policy with a

$1100

deductible provision (per claim) for collisions. During a two-year period, the person files claims for

$290

and

$1600.

The annual premium for the policy is

$360.

With the insurance policy, the person would pay

$nothing.

Without the insurance policy, the person would pay

$nothing.

(Type whole numbers.)

d. Explain why lower insurance premiums go with higher deductibles. Choose the correct answer below.