Exam DISC-RM Practice Question 410
Study guide: Exam DISC-RM
An auto insurer uses a multiplicative rating plan, and one minor violation carries a relativity of 1.10. Driver X's premium before the violation is $1,000, and driver Y's is $2,000. Each gets one minor violation. How do their premiums change?
- A) Each pays $100 more, because a violation carries the same fixed dollar surcharge for everyone
- B) X pays $100 more and Y $200 more, as the surcharge scales each premium
- C) Each pays $200 more, because the surcharge is set by the higher-premium driver
- D) Neither premium changes until the violation leads to a suspension of the driver's license
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