Question

Mary has a Homeowner's policy. Her Coverage A limit of liability is $250,000 and her Coverage B limit of liability is $125,000. Her policy has a 2% deductible. What is her deductible?

Answer 1

Mary's deductible for her homeowner's policy with a 2% deductible rate, based on her Coverage A limit of liability of $250,000, is $5,000.

Step-by-step explanation:

The question asks to calculate the deductible for Mary's homeowner's policy with a 2% deductible rate. The deductible is the amount Mary must pay out of her own pocket before her insurance coverage starts paying. To find her deductible, we will use the Coverage A limit of liability, which is $250,000.

Here's the calculation:

• Coverage A limit of liability = $250,000
• Deductible rate = 2%
• Deductible amount = Coverage A limit of liability × Deductible rate
• The deductible amount is $250,000 × 2%
• Deductible amount = $250,000 × 0.02
• Deductible amount = $5,000

Therefore, Mary's deductible for her homeowner's policy is $5,000.