Robert was complaining to Mae that his automobile insurance was not as good as he was lead to believe when he purchased the policy. Robert had backed into the mailbox leaving his house and scratched the rear bumper of his car. It cost him $375 to buff and repaint the bumper. His insurance company would not reimburse Robert for the repair because the cost of the repair was less than the deductible on his insurance policy. He complained that he can easily afford the repair bill himself, buy why should he have to pay? Robert had very low premiums, but now wondered if he should buy a more expensive policy with a lower deductible. What should Mae tell Robert?

Question

A) Mae should tell Robert to practice risk avoidance and avoid hitting the mailbox
B) Mae should tell Robert to find a better policy and shift more risk to the insurance company
C) Mae should tell Robert to keep his current policy. He should insure for only the big stuff
D) Mae should tell Robert that insurance is to smooth out the everyday bumps of life and that he should shop around for another policy
E) None of the answers are correct

Answer 1

C) Mae should tell Robert to keep his current policy. He should insure for only the big stuff