Ontario Insurance Practice Exam

Having a high deductible in an insurance policy typically results in lower premiums. This is because when a policyholder opts for a higher deductible, they are agreeing to take on more of the financial risk themselves before the insurance coverage kicks in. Consequently, the insurance company carries less risk and is thus able to offer lower premiums. This arrangement is beneficial for individuals who may not anticipate filing frequent claims, as they can save money on their monthly or annual premium costs.

In contrast, a lower deductible would generally result in higher premiums because the insurer would be assuming a greater portion of the risk. The other consequences listed, such as more coverage options or less coverage provided, do not directly correlate with the impact of a high deductible on premiums. The focus here is on the relationship between deductible amounts and premium costs, where a high deductible clearly translates to lower premium expenses.