Question

William pays his $500 premium every 6 months for automobile insurance with collision coverage. His deductible is $750. William caused a minor accident that resulted in $800 of damages to his car and $1,100 of damages to the other car. How much will William pay out-of-pocket to have both cars fixed? $1,100 $500 $800 $0 $1,550 $750

Answer 1

he would pay $750 out of pocket

Answer 2

ANSWER: $0

EXPLANATION: William will have to pay nothing to repair both the cars because he has already paid for automobile insurance with collision coverage. The insurance which William has taken most probably has Liability Coverage which is also known as Casualty Coverage. In this case, the insurance company will first settle the dues of the third party and then cover the bills of insured party which is William's.