Final answer:
The insurance company will pay claims on an estimated 18 out of the 1500 autos.
Explanation:
With a 1.2% probability of an accident per auto, applying this rate to the total number of autos (1500) gives an estimated number of 18 claims (1500 * 0.012 = 18). This calculation assumes a uniform distribution of risk across all insured vehicles, resulting in an expected outcome of approximately 18 claims out of the total pool of insured autos.
This estimation doesn't guarantee that precisely 18 claims will occur; rather, it serves as a probabilistic projection based on the given probability per auto. It's important to recognize that individual circumstances and variations in risk can impact the actual number of claims. However, statistically speaking, out of the 1500 insured autos, an approximate total of 18 claims is anticipated.
Understanding the probability of events occurring helps insurance companies assess risk and determine appropriate premiums, ensuring they can cover potential claims while remaining financially sustainable.