In an auto insurance claim scenario with a policy limit of $35,000, deductible $1,000, and car value $28,000, how much will the insurer pay?

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Prepare for the TExES Business and Finance 276 Test. Study with flashcards and multiple choice questions, each with hints and explanations. Get ready for your exam!

Multiple Choice

In an auto insurance claim scenario with a policy limit of $35,000, deductible $1,000, and car value $28,000, how much will the insurer pay?

Explanation:
When you file a covered auto claim, the payout is the actual cash value of the vehicle minus your deductible, up to the policy limit. Here, the car’s value is 28,000. Subtract the deductible of 1,000 to get 27,000. Since this amount is below the policy limit of 35,000, the insurer pays 27,000. The other figures would either ignore the deductible or exceed the limit, so they aren’t correct in this scenario.

When you file a covered auto claim, the payout is the actual cash value of the vehicle minus your deductible, up to the policy limit. Here, the car’s value is 28,000. Subtract the deductible of 1,000 to get 27,000. Since this amount is below the policy limit of 35,000, the insurer pays 27,000. The other figures would either ignore the deductible or exceed the limit, so they aren’t correct in this scenario.

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