Question

Barry bought 100/300/50 liability with a $500 deductible on collision and $500 deductible on comprehensive coverage. The base premiums are $450, $245, $148, and $85, respectively. How much is his total base premium if his rating factor is 2.60?

A) $675
B) $780
C) $928
D) $2,412.80

Answer 1

450+245+148+85
=928

928×2.60
=2,412.8

Answer 2

The correct answer is D. $2412.8

Explanation:

Sum of all liabilities Barry bought = 100 + 300 + 50 = $450

But $500 is deductible so there will be no charge on the liabilities.

Now, Sum of base premiums = 450 + 245 + 148 + 85 = $928

Also, the rating factor = 2.60

∴ Total base premium = (Sum of base premium) × Rating factor

= 928 × 2.60 = $2412.8

Therefore, the correct answer is D. $2412.8