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Chapter 1: Q 179. (page 40)

Car insurance Justin鈥檚 car insurance has a \(750 deductible per incident. This means that he pays \)750 and his insurance company will pay all costs beyond \(750. If Justin files a claim for \)2,100.

(a) how much will he pay?

(b) how much will his insurance company pay?

Short Answer

Expert verified

(a) Justin will pay $750.

(b) Insurance company will pay $1350.

Step by step solution

01

Part (a) Step 1. Given information

The statement is: Justin鈥檚 car insurance has a $750 deductible per incident.

"he pays $750 and his insurance company will pay all costs beyond $750" which means Justin will pay $750.

02

Part (b) Step 1. Deduct the amount Justin pays from the claim amount. 

From the claim amount, deducting the amount Justin paid gives the amount the insurance company will pay:

$(2100-750)=$1350

Thus, the insurance company will pay $1350.

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