Question

Sue just bought a car for $1500. She is required to carry collision insurance for 80% value, less a $500 deductible. She was listening to music and didn't hear the horn of a truck just before she was hit. Her car was "totaled." She will get a check from the insurance company for how much?

The cost of buying a basic car insurance policy is $750. Optional coverage are radio theft-$50, personal property loss, except cell phone-$75, additional cell phone-$25, upholstery damage from cigarette burns-$65, and exterior damage from falling objects-$110. The minimum cost to insure the car is how much?

Trent Coleman pays a premium of $18.80 per $1000 for a $120,000 life insurance policy. During the year,his policy paid a dividend of $11.90. What is the net cost of the policy for the year?

Answer 1

1.

Amount received from insurance company = (purchase value * % for insurance) - Deductible

Amount received from insurance company = (1500 * 80%) - 500

Amount received from insurance company = $700

2.

Minimum cost to insure the car will be the basic car insurance policy amount i.e., $750. All other coverages are optional and vary from person to person. Thus, basic amount that is required to have a car insurance policy is $750.

3.

Net cost of policy = (Total cost of policy / 1000) * premium - dividend paid

Net cost of policy = (120000/1000 * 18.80 - 11.90

Net cost of policy = $2244.10