Asked by Dallas Thompson on Jul 02, 2024

Universal Insurance Company does business in a state having no-fault insurance. An insured carries all three classifications of insurance, with a $500 deductible for collision. The insured paid an annual premium of $2,790. The insured fell asleep at the wheel and had medical expenses for himself of $1,280 and auto repair expenses of $800. Compute the amount that Universal Insurance Company premium was over the amount the insurance company paid in benefits.

No-fault Insurance

An auto insurance policy wherein insured individuals are compensated by their own insurer, regardless of fault, in the event of an accident.

Collision Deductible

The out-of-pocket expense that a policyholder must pay before an insurance company covers the cost of damage in a collision.

Annual Premium

The amount of money paid per year to keep an insurance policy active.

  • Evaluate the financial consequence of insurance claims, factoring in deductibles, premiums, and coverage maximums.
  • Determine the net cost or savings of insurance to the policyholder after claims and changes in policy status.