Question

Your home insurance policy has a $250 deductible. If a small fire causes $600 damage to your home, what amount of the claim would the insurance company pay?

A) $250
B) $350
C) $450
D) $600

Answer 1

The insurance company will pay $350 for the damages after subtracting the $250 deductible from the total damage cost of $600 (B).

Step-by-step explanation:

If a homeowner's insurance policy has a $250 deductible and a small fire causes $600 in damage, the insurance company will pay the amount of the claim that exceeds the deductible. To find out how much the insurance company will pay, you subtract the deductible from the total damage cost:

Total Damage = $600
Deductible = $250
Insurance Payment = Total Damage - Deductible

Therefore:

Insurance Payment = $600 - $250
Insurance Payment = $350

The insurance company would pay $350 for this particular claim.