Question 41 • CARE_24_25_TX-Mathematical Models with Applications B
Tara and Levi are trying to decide between homeowners insurance policies offered by two different agencies. AAA Insurance has offered to insure their home for an annual premium of $0.38 per $100 with a $500 deductible. Thompson’s Insurance has offered to insure the same home for an annual premium of $0.26 per $100 with an deductible of $1,000.Insurance CompanyAnnual Premium (per $100)DeductibleAAA Insurance$0.38 $500 Thompson's Insurance$0.26 $1,000 The house Tara and Levi purchased is valued at $425,000. Which of the following statements accurately describes the difference between the two plans?
Answer
A
AAA Insurance is cheapest if Tara and Levi experience an incident that results in severe damage or loss to their home.
B
AAA Insurance would be cheapest if Tara and Levi can avoid any incidents that result in severe damage or loss to their home.
C
Thompson’s Insurance is cheaper even if Tara and Levi experience an incident that results in severe damage or loss to their home.
D
Thompson’s will be more expensive whether or not Tara and Levi experience an incident that results in severe damage or loss to their home.