Asked by Rebecca Rivera on Apr 24, 2024
Harrington Insurance Company insures four moving vans for National Moving Company. Annual premiums for the four trucks are: Truck A = $3,480; Truck B = $3,360; Truck C = $2,640; and Truck D = $4,100. Harrington Insurance Company charges a short-rate penalty of 15%. At the end of the second month, National Moving Company sold trucks A and B and canceled their insurance. At the end of the fourth month, National Moving Company sold truck C and canceled its insurance. Compute the amount National Moving Company paid Harrington Insurance Company for insurance during the year.
Short-rate Penalty
A Short-rate Penalty is a fee charged to policyholders who cancel their insurance policy before it expires, calculating the refund using a method that is less favorable than pro-rata.
Annual Premiums
The amount paid on an annual basis for insurance coverage, which can pertain to various types of insurance policies.
Moving Vans
Moving Vans are large vehicles used for transporting household or commercial goods from one location to another during relocation.
- Explore the economic impact of different insurance schemes on policyholders as time advances.
Learning Objectives
- Explore the economic impact of different insurance schemes on policyholders as time advances.
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