Question

HELPPP
Suppose that you head an insurance company. Your most popular insurance policy has a premium of $600 and a deductible of $1,000. This insurance policy provides your state’s minimum coverage of $30,000 for injury or death to one person, $50,000 for injury or death to two or more people, and $10,000 for damage to property, which is called 30/50/10 coverage.

Assume that, on average, 2 of your 100 customers have an accident every year. One of the accidents causes damage to property and the other causes injury or death to one person. Both drivers file for the maximum claims. After paying the claims, will your company still profit from the premiums collected in a year? Explain your answer

Answer 1

Answer:

Yes they will profit $22,000

Step-by-step explanation:

First find total money:

100 customers * $600 premium

= $60,000

add deductibles ($1000) because they are paying for the accident:

=$62,000

Then find the subtractions:

"One of the accidents causes damage to property and the other causes injury or death to one person."

based on the 30/40/10 coverage:

-$30,000 for injury or death to One person

-$10,000 for property damage

62,000 - 40,000 = 22,000

Overall profit : $22,000

I think I did that right...

Answer 2

The company will earn the profit of $22,000.

Profit= $22,000.

What is insurance deductible ?

The amount you pay for covered health care services before your insurance plan starts to pay.

It is given that:

Most popular premium= $600

According to question there is estimation of 100 person

Total money = 100 customers * $600 premium

                    = $60,000

The deductible amount is $1000 because they are paying for the accident.

So, the deductible amount is= $2000

Total deductible amount =$62,000

As one of the accidents causes damage to property and the other causes injury or death to one person.

So, based on 30/40/10 coverage there will be:

• -$30,000 for injury or death to One person
• -$10,000 for property damage

So, the profit will be: 62,000 - 40,000

                                 = $22,000

Overall profit : $22,000

Learn more about insurance deductible here:

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