Asked by Zaylah Harris on Apr 26, 2024
Verified
Driver Sanders has a poor driving record and pays triple the regular premium. The regular premium would be $2,100 and covers Sanders for all three classifications of insurance with a $500 deductible for auto collision. During the year, Sanders sideswiped a row of parked cars. Repairs to the parked cars cost $1,870, $4,950, $2,340, and $378. Repairs to Sanders' car cost $490. Compute the amount the insurance company paid out in benefits over the amount it received in premium for this policy.
Poor Driving Record
A history of traffic violations, accidents, or both, indicating a driver's inability to operate a vehicle safely.
Regular Premium
Payments made on a consistent basis, typically monthly or annually, to maintain an insurance policy or investment product.
- Assess the monetary effect of insurance claims by considering deductibles, premiums, and limits of coverage.
- Calculate the impact of imposing premium surcharges on high-risk drivers across several years.
Verified Answer
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Learning Objectives
- Assess the monetary effect of insurance claims by considering deductibles, premiums, and limits of coverage.
- Calculate the impact of imposing premium surcharges on high-risk drivers across several years.
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