Question

Johann maintains a $75,000 insurance policy on his boat. He pays $50 per month in premiums and his deductible is $2,500. If he is involved in an accident and makes a claim of $3,000 on the policy, how much will he have to pay?

600
2500
3000
5500

Answer 1

Johann will have to pay $2500.

Explanation:

Deductible is the amount that the policy holder has to pay before the company pays.

Here, it is given that Johann has a deductible of $2,500 in his $75000 insurance policy. If he is involved in an accident and if he makes a claim, he will have to pay himself $2500.

Answer 2

The deductible is the amount that the insurance company will deduct from the claim. So, he will have to pay $2500 and the insurance company will pay $ 3000 - $2500 = $ 500.

Answer: $2500.