Johnny pays $600 for six months of automobile insurance. This payment is called the policy. True...

Johnny pays $600 for six months of automobile insurance. This payment is called the policy.

True

False

Solutions

Expert Solution

Answer- False

Explanation- In automobile insurance, there is a contract between the policy holder and the insurance company. The policy holder accepts to pay the premium and the company agrees to pay for the damages as defined in the policy. A policy is thus a document that details the plans or procedures that species the coverage period, the incidents that would be covered and other guidelines framed by the company. Hence, the payment is a premium and not called as a policy.

keosha answered 2 years ago

Next > < Previous

Related Solutions

Leopold owes $600 due in four months and $700 due in 6 months. What cash payment...

Leopold owes $600 due in four months and $700 due in 6 months. What cash payment would pay off both debt if the interest rate is 13.5% (Use six months as the focal point).

An insurance company states in its automobile insurance policy that in case of an accident, it...

An insurance company states in its automobile insurance policy that in case of an accident, it uses the formula P = (x - x^4/5) (y-18 / 50) to determine how much to reimburse a policyholder, where x is the value of the car at the time of the accident and y is the age of the person driving. The policyholder must sign a document indicating agreement with this procedure for determining reimbursement amounts. Joe, a 70 year old policyholder, was driving...

The owner of an automobile insures it against damage by purchasing an insurance policy with a...

The owner of an automobile insures it against damage by purchasing an insurance policy with a deductible of 250. In the event that the automobile is damaged, repair costs can be modeled by a uniform random variable on the interval (0, 1500) In the above question, I am asked to find Var(Y) where Y = (X - 250). The solution actually involves finding E(Y) and E(Y^2) through intergration, then Var(Y) = E(Y^2) - E(Y)^2. I understand the solution. My question...

1. The cash payment by a consumer or employer to an insurance company is called: A)...

1. The cash payment by a consumer or employer to an insurance company is called: A) A co-payment B) A deductible C) A limit D) A premium 2. The largest health insurance program in the United States is: A) Blue Cross-Blue Shield B) Veterans Affairs C) Medicare D) Medicaid 3. The part of Medicare that helps pay for ambulance services is: A) Part A B) Part B C) Part C D) Part D 4. True or False? An economic unit refers...

What is the present value of an ordinary annuity that pays $300 every six months for...

What is the present value of an ordinary annuity that pays $300 every six months for four years if the discount rate is 5.6% per year? Question 5 options: A) $1,994.34 B) $2,109.56 C) $2,123.79 D) $2,098.25 E) $2,281.41

A special insurance policy pays $1000 at the end of the year of death for the...

A special insurance policy pays $1000 at the end of the year of death for the first 5 years and $500 at the end of the year of death for the next 5 years. Mortality follows the Illustrative Life Table and i = 0.06. Calculate the actuarial present value of a policy on (50). (Answer is 44.71 but idk how to get there)

An insurance policy sells for $600. Based on past data, an average of 1 in 125...

An insurance policy sells for $600. Based on past data, an average of 1 in 125 policyholders will file a $15,000 claim, an average of 1 in 100 policyholders will file a $30,000 claim, and an average of 1 in 500 policyholders will file a $70,000 claim. Find the expected value (to the company) per policy sold. If the company sells 30,000 policies, what is the expected profit or loss?The expected value is $____. (Simplify your answer.) The expected (loss...

What do each number on the policy limits of 50/100/25 on an automobile insurance policy mean?

If a life insurance policy pays dividends, it is said to be a universal life b...

If a life insurance policy pays dividends, it is said to be a universal life b participating c investment grade d paid-up e extended

An insurance policy on an electrical device pays a benefit of $2850 if the device fails...

An insurance policy on an electrical device pays a benefit of $2850 if the device fails during the first year. The amount of the benefit decreases by $950 each successive year until it reaches 0 . If the device has not failed by the beginning of any given year, the probability of failure during that year is 0.29. Find the expected benefit under this policy?

Subjects