Question

Bill converse of Pomona California recently slid off a gravel road and struck a tree bills vehicle suffered $7500 in damages the vehicle has a book value of $6000 bill carried collision insurance with a $500 deductible how much will bill be reimbursed by his policy

Answer 1

In this case the deductible amount is $500 and this means that Bill will have to pay an amount of $500 and the insurance company will pay over and above this amount.

In this case the amount of loss ($7500) is greater than the book value ($6,000). Hence this will be regarded as a case of total loss.

Thus the liability of the insurance company will be limited up to the amount of $6,000 only. Hence the amount paid by the insurance company will be = $6,000 - $500

= $5,500