Saving money on your auto insurance

A key principle of buying insurance is to retain risks you can afford and insure against risks you can't afford. It is therefore important to recognize that some cost$-$saving decisions are more advisable than others when choosing types of coverages and liability limits$.$

Consider Megan and the adjustments she is considering making to her policy. First determine the effect each change would have on her monthly premium, then indicate whether each change is generally advisable by selecting "Yes" or $"$No$"$ in the final column.

Smart Savings on Insurance Premiums

Megan's policy is a personal auto policy and provides liability coverage with limits of $\frac{250}{500}\frac{?}{250},$$$50,000$ of medical payment insurance, and uninsured and underinsured motorist coverage with limits of $\frac{1}{2}.$ She has collision and comprehensive auto insurance, both with no deductible.

Effect on Premium Advisable

Switch from limits of $\frac{250}{500}\frac{?}{250}$ to $\frac{100}{300}\frac{?}{100}$

Increase collision and comprehensive deductible to $$500$

Eliminate Coverage C

Suppose Megan gets quotes from other auto insurance companies and finds that one company offers the same coverage as her current plan but for $$15$ less per month.

True or False: Rates can vary substantially across policies with identical coverage; therefore, Megan should consider switching to the cheaper company.

False

True

Options are increase or decrease and advisable yes or no$)$