Question

Calculate how much the insurance company would pay in benefits in the following case.

John has purchased collision insurance with a $100-deductible clause, and automobile medical payments insurance in the amount of $1,000. In an accident in which John is at fault, he incurs injuries for a total expense of $1,100. Also, $900 worth of damage is done to Sam's car. How much does the insurance company pay Sam?

Benefit payment?

Answer 1

Correct answer: $1800

Explanation:

Medical payments insurance TOTAL: $1000

Injuries sustained: $1100

John will get $1000 for medical

$900 worth of damage to vehicle LESS John's $100 deductible: $800 due from ins co.

$1000 med pay + $800 damage pay= $1800

Answer 2

If John is at fault, he must pay the deductible amount of $100 himself.

As given,

John has an automobile medical payments insurance in the amount of $1,000. So, he will get $1000 complete for his medical bills by the insurance company. Also, he has done $900 worth of damage to Sam's car, but the company will pay him $800 for this.

Hence, total amount becomes = 1000+800 = $1800

So, the insurance company will pay John a sum of $1800.