Question 3 Find the amount paid by each insurance company. Assume that any coinsurance requirement is...

Question 3

Find the amount paid by each insurance company. Assume that any coinsurance requirement is met.

Insurance loss: $15,000
Company A coverage: $90,000
Company B coverage: $30,000

		A pays: $11,250 B pays: $3750
		A pays: $13,500 B pays: $1500
		A pays: $10,500 B pays: $4500
		A pays: $15,000 B pays: $0

Solutions

Expert Solution

Insurance Loss = $15,000

Company A coverage = $90,000

Company B coverage = $30,000

Total Coverage = Company A coverage + Company B coverage

= $90,000 + $30,000

= $120,000

Company A share = 75% ($120000 x 75% = $90,000)

Company B share = 25%

Insurance Loss = $15,000

Company A share = $15,000 x 75%

= $11,250

Company B share = $15,000 x 25%

= $3,750

Answer: A pays: $11,250

B pays: $3,750

jeff jeffy answered 1 year ago

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