Question

Which formula best describes the amount an insurance company will pay you for your loss?

a) Payment = Loss - Deductible
b) Payment = Loss + Deductible
c) Payment = Loss x Deductible
d) Payment = Loss / Deductible

Answer 1

The correct answer is letter "A": Payment = Loss - Deductible.

Step-by-step explanation:

The insurance deductible is a specific amount the insured's payment must reach usually per year, so that the insurance company benefits start to apply taking care of the bills and services according to the insured condition. In the case where a particular insured submits too many claims within the same valid insurance period, deductibles work like cushions.

In that case, if a claim is covered by the insurance policy, they can pay the amount of a loss subtracting the deductible (Payment = Loss - Deductible).

Answer 2

a) Payment = Loss - Deductible
because you always need to pay your deductible so you won't get this amount of money back