If an insured has a $100 deductible and submits three claims of $300, $200, and $50, what will the total compensation be?

If an insured has a $100 deductible and submits three claims of $300, $200, and $50, what will the total compensation be?

• A. $50
• B. $300
• C. $400
• D. $200

Answer: (B)

To determine the total compensation that the insured will receive after submitting three claims with a deductible of $100, we first need to compute the payout for each claim after the deductible amount is subtracted. For the first claim of $300: - The deductible of $100 is subtracted from $300, resulting in a payout of $200. For the second claim of $200: - Again, after subtracting the deductible of $100, the payout becomes $100. For the third claim of $50: - Since the claim amount ($50) is less than the deductible ($100), no payout will be made for this claim. Now, summing up the payouts from the first two claims: - From the first claim: $200 - From the second claim: $100 - The third claim results in no payout. Adding these amounts together gives: $200 + $100 = $300. Thus, the total compensation that the insured will receive after submitting the claims, accounting for the deductible, is $300.

To determine the total compensation that the insured will receive after submitting three claims with a deductible of $100, we first need to compute the payout for each claim after the deductible amount is subtracted.

For the first claim of $300:

• The deductible of $100 is subtracted from $300, resulting in a payout of $200.

For the second claim of $200:

• Again, after subtracting the deductible of $100, the payout becomes $100.

For the third claim of $50:

• Since the claim amount ($50) is less than the deductible ($100), no payout will be made for this claim.

Now, summing up the payouts from the first two claims:

• From the first claim: $200

• From the second claim: $100

• The third claim results in no payout.

Adding these amounts together gives:

$200 + $100 = $300.

Thus, the total compensation that the insured will receive after submitting the claims, accounting for the deductible, is $300.