If a homeowner has an insured loss of $10,000 damage to the home, $2,000 damage to personal property, and $2,000 in additional living expenses, how much will the policy pay given a $100 deductible?

If a homeowner has an insured loss of $10,000 damage to the home, $2,000 damage to personal property, and $2,000 in additional living expenses, how much will the policy pay given a $100 deductible?

• A. $12,900
• B. $13,900
• C. $15,000
• D. $14,900

Answer: (B)

To determine the total amount the policy will pay out for the insured loss, you first need to consider each component of the loss and then apply the deductible to the total amount. The homeowner has the following losses: - Damage to the home: $10,000 - Damage to personal property: $2,000 - Additional living expenses: $2,000 First, add these amounts together: $10,000 (home) + $2,000 (personal property) + $2,000 (additional living expenses) = $14,000 total loss. Next, subtract the deductible from the total loss amount. The deductible in this case is $100: $14,000 (total loss) - $100 (deductible) = $13,900. Therefore, the insurance policy will pay out $13,900 after accounting for the deductible. This is why this answer is correct, as it accurately reflects the total compensation due to the homeowner after applying the policy's terms regarding the deductible.

To determine the total amount the policy will pay out for the insured loss, you first need to consider each component of the loss and then apply the deductible to the total amount.

The homeowner has the following losses:

• Damage to the home: $10,000

• Damage to personal property: $2,000

• Additional living expenses: $2,000

First, add these amounts together:

$10,000 (home) + $2,000 (personal property) + $2,000 (additional living expenses) = $14,000 total loss.

Next, subtract the deductible from the total loss amount. The deductible in this case is $100:

$14,000 (total loss) - $100 (deductible) = $13,900.

Therefore, the insurance policy will pay out $13,900 after accounting for the deductible. This is why this answer is correct, as it accurately reflects the total compensation due to the homeowner after applying the policy's terms regarding the deductible.