Personal Finance 1st Edition by Jack R. Kapoor

Exercise 23

Determining the Claim Amount (with Deductibles). For each of the following situations, what amount would the insurance company pay?

a. Wind damage of $835; the insured has a $500 deductible.

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b. Theft of a home entertainment system worth $1,150; the insured has a $250 deductible.

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c. Vandalism that does $425 of damage to a home; the insured has a $500 deductible.

Step 1 of 6

a) Determine the claim amount:

Amount claimed from the insurance company will be determined by deducting the deductibles from the value of damage. It calculates using the below formula:

Substitute the values: