Question

William pays $500 premium every six months for automobile insurance with collision coverage. His deductible is $750. William caused a minor accident that resulted in $700 of damage to his car and $1,100 of damage to the other car. Williams’s car looks and drives fine if he chooses not to file a claim to repair his car how much will you pay out-of-pocket to help the other cars fixed?

Answer 1

ANSWER: $1,100

EXPLANATION: William had his insurance for his automobile but it is nowhere indicated that he had third party coverage. He had collision coverage which insured his car and saved his damage of $700. But he definitely needs to pay out-of-pocket the sum of $1,100 for the other car which got damaged in the accident.

Answer 2

A collision coverage type of insurance only the covers the cost that is incurred due to damage to your car. It does not include the cost for the other car. Therefore you will have to pay the total of $1,100