Question

math of finance sem a- a
urance
erage and deductibles
insurance claims
the table shows deductibles and limits for certain claims.
stephen rear - ended another car at a traffic light, causing $800 in minor
damage.
how much will the insurance pay to repair stephens car?
$800
$500
$300
$5,000

Explanation:

Step1: Identify the scenario

Stephen's incident is a minor accident, so we use the "Minor Accident" row from the table.

Step2: Recall deductible and damage

Deductible for minor accident is \$500, damage is \$800.

Step3: Calculate insurance payment

Insurance pays (Damage - Deductible) if damage > deductible. So \( 800 - 500 = 300 \).

Answer:

\$300