Registered Insurance Brokers of Ontario (RIBO) Exam 2025 – 400 Free Practice Questions to Pass the Exam

The correct answer highlights the importance of the insured's responsibility in managing their own financial risk when a claim occurs. A deductible is the amount that the insured agrees to pay out-of-pocket before their insurance coverage kicks in. When selecting a deductible, insured individuals need to consider how much they are financially comfortable paying if they need to make a claim. A higher deductible often leads to lower premium costs, while a lower deductible results in higher premiums. Therefore, the insured's ability and willingness to cover out-of-pocket expenses effectively influence their choice of deductible.

While the other options play a role in the decision-making process regarding insurance policies, they do not directly address the specific consideration around deductibles. For instance, understanding potential types of losses is valuable for comprehending risk exposure, but it doesn’t directly impact the selection of a deductible amount, which hinges more on personal financial capacity. Similarly, while coverage limits and the insurer's reputation are crucial elements of overall policy selection, they are not the primary factors influencing the decision on what deductible to choose.