Question

Alicia accidentally hit the bumper of her car by driving into a tree. She has a car insurance policy with $1000 deductible. The total damage to the car is $500. How much will the car insurance company pay in this scenario?

A. $500
B.$1000
C. Nothing
D. the total value of the car

Answer 1

The Correct Answer: nothing

Answer 2

C. Nothing

Step-by-step explanation:

In auto-insurance, a deductible is the amount of money you pay from the packet to cover part of the damages arising from an accident. A deductible is a way of sharing risk between the insured and the insurance company. A $1000 deductible implies that the insured will pay $1000 from their pocket when they make a claim.

When the claim amount is less than the deductible, the insurance will not pay anything. In this case, the claim is $500, and the deductible is $1000. The insurance company will pay a zero amount.