Johann maintains a $75,000 insurance policy on his boat. He pays $50 per month in premiums and his deductible is $2,500. If he is involved in an accident and makes a claim of $3,000 on the policy, how much will he have to pay?

Question

Mathematics

Nathen Buchanan

27 May, 10:27

Johann maintains a $75,000 insurance policy on his boat. He pays $50 per month in premiums and his deductible is $2,500. If he is involved in an accident and makes a claim of $3,000 on the policy, how much will he have to pay?

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Answers (1)

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Henry · Answer 1

The problems states that his deductible is $2500 so he will get $500 ($3000 - 2500) from the insurance company.

If this accident happens the first month he has insurance he will also have spent $50 so he will have $450

You did not say how long he has been paying his premiums but I am going to assume it has been a year or 12 months @ $50 or $600. In that case we do $500-600 = $-100 and he will have to pay $100

I don't care for the question because premiums get paid whether you make a claim or not and should not be considered in how much he will get if he makes a claim.