Question

Deductible: $1,000.00 Event 1 Event 2 Description Injury to guest Property Damage Repair cost $20,000.00 $1,800.00 If no insurance claim is submitted for Event 2, what is the owner's out of pocket cost for the repair? A. $1,000 C. $19,000 B. $20,000 D. $1,800

Answer 1

The owner's out-of-pocket cost for Event 2, which is $1,800 for Property Damage repair, would be the total repair cost since no insurance claim is submitted and the repair cost does not exceed the deductible. Therefore correct option is D

Step-by-step explanation:

If no insurance claim is submitted for Event 2, which is Property Damage with a repair cost of $1,800.00, the owner's out-of-pocket cost for the repair would be the full cost of the repair because the deductible is not met.

Since the deductible is $1,000.00 and no other claims like Event 1 are considered, Event 2's repair cost does not exceed the deductible, and thus, insurance does not cover any of it.

Therefore, the owner pays the total repair cost of Event 2 out of their pocket. The correct answer is D. $1,800.