The policyholder is really tight on cash and wants to trim down their insurance premiums so they can devote more of their budget to paying off a large credit card debt. Which coverage makes the most sense to eliminate? A.) Liability coverage, because it is the most expensive part of their bill
B.) Collision coverage, because their car is quite old and the deductible is relatively high
C.) Uninsured motor vehicle coverage, because they already have car insurance, so they won’t ever be uninsured
D.) They cannot eliminate any of this coverage -- it is all required by Federal law

Considering the available options, the coverage that makes the most sense to eliminate is the "Collision coverage, because their car is quite old and the deductible is relatively high."

What is Insurance Premium?

The insurance premium is the money by an individual or company to insure some specific properties. Insurance premium usually covers healthcare, auto, home, and life insurance.

However, one of the ways to reduce the mount paid on insurance premiums is to reduce coverage on older cars.

It is believed that if the car is worth less than 10 times the premium, paying for the coverage is not cost-effective.

Hence, in this case, it is concluded that the correct answer is option A. "Collision coverage because their car is quite old and the deductible is relatively high."

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step-by-step explanation: