Question

annual premium adjustments based on risk factors
an insurance policy has an annual base premium of $1,200 before adjustments. the final annual premium is influenced by the factors listed

• driver’s age: increase by $200 if the driver is under 25 years old
• driving record: increase by $300 for any at - fault accidents in the past three years
• type of car: increase by $100 for high - performance vehicles
• chosen coverages and limits: increase by $150 for each additional coverage beyond the standard package

lara is 47 years old, has two at - fault accidents, drives a standard vehicle, and does not select any additional coverage.
what would her annual premium be after adjustments?
$1,500
$1,800
$1,600
$2,000

Explanation:

Step1: Analyze age factor

Lara is 47 (not under 25), so age adjustment: $0$.

Step2: Analyze driving record

Two at - fault accidents, each adds $300$. So driving record adjustment: $2\times300 = 600$.

Step3: Analyze type of car

Drives standard vehicle, so car type adjustment: $0$.

Step4: Analyze coverage

No additional coverage, so coverage adjustment: $0$.

Step5: Calculate total premium

Base premium is $1200$. Total adjustment: $0 + 600+0 + 0=600$. Final premium: $1200 + 600=1800$.

Answer:

\$1,800