Question

Renters insurance covers $12,000 in personal property and $100,000 in liability for $100 per year, with a $500 deductible. What percentage of the maximum coverage for your personal property are you paying in premium?.

Answer 1

Answer:

rent insurance 12000

property 100000

liability 100

cash 500

Explanation:

98,800

Answer 2

The percentage of the maximum coverage on the personal property which is being paid in premium is 0.5%.

What is insurance?

Insurance is a contract where the insurance company agreed to indemnify the insured person against any loss or damages as specified in the contract.

Given values:

Insurance amount: $12,000

Value of Property: $100,000

Liability on insurance : $100

Deductible : $500

Computation of percentage that paid in premium:

$\rm\ Percentage \rm\ paid \rm\ in \rm\ premium =\frac{\rm\ Liability + \rm\ Deductible }{\rm\ Insurance \rm\ Value + \rm\ Property Value} \\\rm\ Percentage \rm\ paid \rm\ in \rm\ premium=\frac{\ 100+\ 500}{\ 12,000 + \ 100,000} \\\rm\ Percentage \rm\ paid \rm\ in \rm\ premium=\frac{\ 600}{\ 112,000} \\\rm\ Percentage \rm\ paid \rm\ in \rm\ premium=0.5%$

Therefore, when the insurance coverage is $112,000 ($12,000 + $100,000) and the premium is $600 ($100 + $500), then the percentage of premium on insurance comes out be 0.5%.

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