Susie is thinking about changing her auto insurance policy at Fret-No-More Auto Insurance. Her current policy includes the following options: $50/100,000 limit for bodily injury, $25,000 limit for property damage, $250 deductible for collision and $50 deductible for comprehensive. Which of the following changes would increase Susie's limits the most without

| Fret-No-More Auto Insurance |
|---|---|
| Type of Insurance Coverage | Coverage Limits | Annual Premiums |
| Bodily Injury | $25/50,000 | $21.35 |
| | $50/100,000 | $32.78 |
| | $100/300,000 | $42.10 |
| |
| Property Damage | $25,000 | $115.50 |
| | $50,000 | $142.44 |
| | $100,000 | $193.78 |
| |
| Collision | $100 deductible | $490.25 |
| | $250 deductible | $343.33 |
| | $500 deductible | $248.08 |

Calculate the increase in bodily injury limit: $300,000 - $100,000 = $200,000. - Calculate the increase in property damage limit (to $50,000): $50,000 - $25,000 = $25,000. - Calculate the increase in property damage limit (to $100,000): $100,000 - $25,000 = 75 , 000. − T h e l a r g es t in cre a se i s \boxed{ 200,000} , which corresponds to increasing the Bodily Injury coverage.

Explanation

Analyze the current policy Susie's current insurance policy includes:


Bodily injury: $50/100,000 - Property damage: $25,000
Collision: $250 deductible - Comprehensive: $50 deductible

The objective is to find the change that increases Susie's limits the most.

Calculate the increase in coverage limits We need to compare the possible changes and their corresponding increase in coverage limits.

Bodily Injury : Increase from $50/100,000 to 100/300 , 000. T h e in cre a se inb o d i l y inj u ry l imi t i sc a l c u l a t e d a s : $300,000 - 100,000 = 200 , 000 $

Property Damage : Increase from $25,000 to 50 , 000. T h e in cre a se in p ro p er t y d ama g e l imi t i sc a l c u l a t e d a s : $50,000 - 25,000 = 25 , 000 $

Property Damage : Increase from $25,000 to 100 , 000. T h e in cre a se in p ro p er t y d ama g e l imi t i sc a l c u l a t e d a s : $100,000 - 25,000 = 75 , 000 $

Collision : Changing the deductible does not increase the limits, so these options are not relevant.

Compare the increases Comparing the increases, we have:



Bodily Injury increase: $200,000 - Property Damage increase (to $50,000): $25,000 - Property Damage increase (to $100,000): $75,000 The largest increase is $200,000, which comes from increasing the Bodily Injury coverage.

Examples
Understanding insurance policies is crucial for financial security. For instance, if Susie causes an accident, her bodily injury coverage helps pay for the other driver's medical bills, while property damage coverage helps pay for damage to their car. By increasing her coverage limits, Susie protects herself from potentially large out-of-pocket expenses. This is similar to managing risk in other areas of life, such as investing or starting a business, where understanding potential losses and gains is essential for making informed decisions.

Answered by GinnyAnswer | 2025-07-07

To maximize her auto insurance limits, Susie should change her bodily injury limit from $50/100,000 to $100/300,000, resulting in a $200,000 increase. This is the largest possible increase compared to adjustments in property damage limits. Therefore, the most beneficial change would be increasing the bodily injury coverage.
;

Answered by Anonymous | 2025-07-10