Question

Felix Madison has $10,000 worth of property damage insurance and a $1000 deductible collision insurance policy. He had a tire blowout while driving and crashed into a $1,400 fire hydrant. The crashed caused $1,600 in damages to his car.

A. Which insurance covers the damage to the fire hydrant

B. How much will the insurance company pay for the fire hydrant?

C. Which insurance covers the damage to the car?

D. How much will the insurance company pay for the damage to the car?

Answer 1

Financial Math

We need to find the amount insurance company pay, damage covers and about kinds of insurance covers.

Solution:

A). We know, car is a property.

The insurance covers the damage to the fire hydrant is Property damage.

B). Amount due to fire hydrant = $1400

$1400 is less than $10000

So, the fire hydrant covers the full amount.

Amount, the insurance company pay for the fire hydrant =$1400

C). The insurance covers the damage to the car = Collision insurance

D). The insurance company pay for the damage to the car

= $Total \space amount - Amount \space paid \space by \space the \space Felix \space Madison$

=$\$ 1600 - \$1000 = \$600$