If a $430 loss occurs and there is a $300 deductible under Specified Perils, what would the insurer pay?

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Study for the Other Than Life (OTL) Agent's Exam A. Enhance your knowledge with questions and detailed explanations. Prepare confidently for your insurance exam!

Multiple Choice

If a $430 loss occurs and there is a $300 deductible under Specified Perils, what would the insurer pay?

Explanation:
A deductible is the portion of a loss that the insured must pay before the insurer pays anything. With a 430 loss and a 300 deductible, the insured covers 300, and the insurer covers the rest: 430 − 300 = 130. Under Specified Perils, this calculation is the same—the deductible reduces the amount the insurer pays, provided the loss exceeds the deductible.

A deductible is the portion of a loss that the insured must pay before the insurer pays anything. With a 430 loss and a 300 deductible, the insured covers 300, and the insurer covers the rest: 430 − 300 = 130. Under Specified Perils, this calculation is the same—the deductible reduces the amount the insurer pays, provided the loss exceeds the deductible.

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