Question

Your insured runs a red light and hits another vehicle. Damage to the insured car is $7,600 and your policy has a $500 collision deductible. Damage to the other vehicle is $5,750 and is undriveable. Repair takes 3 weeks and the claimant incurs $657.00 in rental car charges. Fortunately the claimant was not injured seriously and has not seen a doctor. You think that if you handle the PD claim promptly and fairly, no injury claim will be made. How much will you pay for the property damage claim?

(A) $12,850
(B) $7,100
(C) $5,750
(D) $6,407

Answer 1

The insurance company will pay a total of $12,507.00 for the property damage claim, including damage to both vehicles and rental car charges.

Step-by-step explanation:

To calculate the amount paid for the property damage claim, we need to consider the deductible, the damage to the insured car, the damage to the other vehicle, and the rental car charges incurred by the claimant.

The insured car has a damage cost of $7,600, and since there is a $500 deductible, the insurance company will pay $7,600 - $500 = $7,100 for the insured car's damage.

The damage to the other vehicle is $5,750, which will be paid in full by the insurance company. Additionally, the rental car charges of $657.00 will also be covered by the insurance company.

Therefore, the total amount paid for the property damage claim will be $7,100 + $5,750 + $657.00 = $12,507.00.