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If an insurance claim is submitted for Event 1, what is the owner's out-of-pocket cost for the repair?

\begin{tabular}{|l|c|r|}
\hline
\multicolumn{3}{|c|}{ Deductible: \[tex]$2500.00} \\
\hline
& Event 1 & Event 2 \\
\hline
Description & Fire damage & Burst water pipes \\
\hline
Repair Cost & \$[/tex]40,500.00 & \[tex]$3,000.00 \\
\hline
\end{tabular}

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Sagot :

GinnyAnsweridn
To determine the owner's out-of-pocket cost for the repair associated with Event 1, given the deductible of [tex]$2,500.00 and the repair cost for Event 1 of $[/tex]40,500.00, we proceed as follows:

1. Identify the deductible amount: The deductible is the amount the owner must pay out of pocket before the insurance coverage applies. Here, the deductible is [tex]$2,500.00. 2. Identify the repair cost for Event 1: The total cost to repair the damage caused by Event 1 (fire damage) is $[/tex]40,500.00.

3. Determine out-of-pocket cost: The owner needs to pay up to the deductible amount out of pocket. If the repair cost is larger than the deductible, the owner will only pay the amount of the deductible. In this case, since the repair cost ([tex]$40,500.00) is significantly higher than the deductible ($[/tex]2,500.00), the owner will pay the deductible amount of [tex]$2,500.00 out of pocket. Therefore, the owner's out-of-pocket cost for the repair related to Event 1 is: \[ \$[/tex]2,500.00
\]
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