Question

Erik recently bought a new car and purchased auto insurance for it. His annual premium is $2,807 and his deductible is $1,000. He was involved in an accident on the way home from work one day, and the costs of his repairs are $3,108. How much will Erik's insurance company pay?

Answer 1

Given

Erik recently bought a new car and purchased auto insurance for it.

His annual premium is $2,807 and his deductible is $1,000.

He was involved in an accident on the way home

costs of his repairs are $3,108

Find out the Erik's insurance company pay

To proof

As given in the question

deductible cost = $1,000

Deductible

This is the amount of money you will first be responsible for before the insurance company start to cover damage cost.

He was involved in an accident on the way home from work one day, and the costs of his repairs are $3,108.

Erik's insurance company pay = 3108 - 1000

= $ 2108

Therefore the Erik's insurance company pay $ 2108.

Hence proved

Answer 2

Erik's insurance company will pay $2,108

Explanation:

We know that Erik's annual premium is $2,807 and his deductible is $1,000.

This means that in case of any accident, the insurance company will pay anything after Erik pays first $1,000 of the total cost incurred due to accident.

Since the cost of repairs after accident is $3,108 and we know that Erik will have to pay $1,000 out of the total cost. Therefore, insurance company will pay the amount remaining after Erik has made a payment of $1,000.

Thus, Erik's company will pay
`=3108-1000=\$2,108`