A Car Owner Must Decide Whether She Should Take Out

Multiple Choice

A car owner must decide whether she should take out a $100-deductible collision policy in addition to her liability insurance policy. Records show that each year, in her area, 17% of the drivers have an accident that is their fault or for which no fault is assigned, and that the average cost of repairs for these types of accidents is $1200. If the $100-deductible collision policy costs $100 per year, would she save money in the long run by buying the insurance or "taking the chance"? (Hint: Find the expected values if she has the policy and if she doesn't have the policy and compare them.) ​

A) by buying the insurance
B) by taking the chance