To determine the owner's out-of-pocket cost for the repair of Event 1, we need to focus on the specific details given for this event. Here is a step-by-step breakdown of how we arrive at the solution:
1. Event Description: Event 1 involves fire damage.
2. Repair Cost: The repair cost for Event 1 is [tex]$40,500.00.
3. Insurance Deductible: The deductible is $[/tex]2,500.00, which means that in the case of an insurance claim, this amount must be paid by the owner before the insurance covers the remaining cost.
However, in this scenario, no insurance claim is being submitted for Event 1. Therefore, the insurance deductible is not relevant to our calculation. The owner must cover the entire repair cost out of pocket.
Thus, the out-of-pocket cost for the repair is simply equal to the full repair cost of Event 1:
[tex]\[ \text{Out-of-pocket cost for Event 1} = \text{Repair Cost of Event 1} = \$40,500.00 \][/tex]
Therefore, the owner's out of pocket cost for the repair of Event 1 is $40,500.00.
