b) Define deductible. c) What happens to your premium when the deductible is lowered? d) List three major factors that are considered when determining the amount of an insurance quote? e) Describe a person who might need to pay a lot of money for insurance.

b) Define deductible. c) What happens to your premium when the deductible is lowered? d) List three major factors that are considered when determining the amount of an insurance quote? e) Describe a person who might need to pay a lot of money for insurance.

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter10: Managing Property And Liability Risk

Section10.2: Understanding How Insurance Works

Problem 3CC

See similar textbooks

Related questions

Q: Warren bought a bicycle for $2500, plus 13% HST. He arranged to make a payment to the store at the…

A: Loans are paid by monthly payment that carry the payment of interest and also payment for the…

Q: Related to Solved Problem 3.3] For each of the following situations, choose the equation needed to…

A: Cost of debt (yield to maturity) refers to the total return generated by a bond until it matures.…

Q: You have an opportunity to invest $104,000 now in return for $79,100 in one year and $30,100 in two…

A: Solution:- Net Present Value (NPV) means the net value in today’s terms after adjusting initial…

Q: Find the quote for the Lake Lead Group. Assume that the dividend is constant. a. What was the…

A: Given: Lake lead Grp Amount Highest price 56.26 Low price 33.87 Dividend 1.99 Dividend…

Q: An investor places $X into an account earning monthly compounded interest, and makes no further…

A: The present value will worth more in future due to time value of money concept(Earn interest on…

Q: If you invest $2,000 today, withdraw $1,000 in 3 years, deposit $3,000 in 5 years, deposit $1,500 in…

A: Given, The amount invested today is $2000 The rate of interest is 7%

Q: Given the annual interest rate and a line of an amortization schedule for that loan, complete the…

A: Solution:- When a loan is taken, it can either be repaid as a lump sum payment or in installments.…

Q: A rented his apartment to B for $5,000 per month in January 2015. However, they both agreed to…

A: A has the legal right to sue B for the unpaid rent. The amount that A can collect, on the other…

Q: 11. Bond Pricing. A General Motors bond carries a coupon rate of 8%, has 9 years until maturity, and…

A: Bond valuation (BV) refers to a method or technique which is used to compute the current value or…

Q: Marcus has won a $6,000,000 state lottery. He can take his prize as either 15 yearly payments of…

A: State Lottery amount= $ 6,000,000 Marcus has won this lottery amount.So, that option which gives…

Q: ILLUSTRATE THE VARIOUS COST CLASSIFICATIONS. (PLEASE INCLUDE PHOTOS OR TEXT FOR THE EXPLANATION)…

A: Cost - Cost is that Value of any business / product which was directly or indirectly influenced with…

Q: FarCry Industries, a maker of telecommunications equipment, has 6 million shares of common stock…

A: The following information is provided in the question: Common stock outstanding=6 million Preferred…

Q: What will be TapDance’s WACC?

A: The formula to compute WACC is shown below: = Weightage of debt × cost of debt × ( 1- tax rate) +…

Q: Mr. Alex, a British arbitrageur, has the following data. The one-year interest rate offered in the…

A: Given: UK interest rate =8% Australia interest rate = 5% Spot rate = £0.3000/AUD Forward rate =…

Q: Finance A financial instrument provides three future cash flows: $1,710.00 at the end of 3 years…

A: Duration of bond is amount of period required to recover the investment in bond considering the…

Q: Compute the IRR statistic for Project E. The appropriate cost of capital is 9 percent. (Do not round…

A: IRR refers to the internal rate of return. It is an important capital budgeting tool that is used to…

Q: o decrease costs of operating a lock in a large river, a new system of operation is proposed. It…

A: The cost of any project or asset is capitalized if the benefits from such cost are going to be…

Q: A real estate developer bought land for $170 000.00 down and monthly payments of $8 450.00 for 5…

Q: Use the following exchange rates to calculate the cross rates: EURUSD = 1.0500…

A: Solution:- Exchange rate means the rate of one currency in terms of other.

Q: An automobile company is planning to install inspection procedures to reduce the cost of repairs to…

A: The Internal Rate of Return and the Net Present Value: The internal rate of return or the rate of…

Q: Becky Martinez owns stock in GBX Corporation. The GBX stock has a current market value of $70 a…

A: The following information has been provided in the question: Current market value of GBX stock =$70…

Q: Compute the payback statistic for Project B if the appropriate cost of capital is 11 percent and the…

A: Payback Period is the length of time required to recover the cost of Investment. (a) When Cash…

Q: How important is trade credit as a source of short-term financing?

A: Trade Credit is the largest use of capital by the business -to business sellers in the United…

Q: QUESTION 6 If I have a simple discount note for 75 days (ordinary interest), a discount of $150, and…

A: The rate of Discount is calculated with the help of following formula Rate of Discount = Discount…

Q: Shane contributed $2,250 at the end of every 3 months into an RRSP fund earning 2.41% compounded…

A: Here, Amount deposit after each interval = $2,250 Interest rate = 2.41% Time period = 11 years To…

Q: Estimate the annual percent rate for the add on loan Using the given number of payments and annual…

A: As per the information provided: N = 48 R = 8% To determine: We have to estimate the annual…

Q: A bond with 20 years to maturity and a face value of $1000 pays semi-annual coupons at a rate of 9%…

A: Given Information:Par value of bond = $1000 Annual coupon rate of bond = 9% (paid semi annually)…

Q: (1) Determine how much will his daughter be able to withdraw each year starting in year 18 and…

A: In Step 1, calculate the future value of the amount saved from year 0 to 17 or the future value of…

Q: The spot price of a non-dividend paying stock is recorded as ₺100 at the close of the day. You…

A: Value of put option With stock price and strike price, the value of put option at a point in time is…

Q: A stock price is currently $60. Over each of the next two six-month periods, it is expected to go up…

A: A binomial tree is a graphical depiction of the potential inherent values of an option at various…

Q: You want to purchase a building to open your restaurant and you are given 3 different payment…

A: Present value of option would be the value of option that would decide which option would be better.…

Q: Steady Company's stock has a beta of 0.24. If the risk-free rate is 6.1% and the market risk premium…

A: Solution:- Company’s cost of equity means the minimum rate of return required by the equity…

Q: Fishing Designs has arranged to borrow $12,000 today at 10% interest. The loan is to be repaid with…

A: Loan Payments are the amounts that the borrower is required to return in line with the terms of the…

Q: Which of the following statements is FALSE? A. Equity cost of capital is normally higher then…

A: The Modigliani Miller propositions: In their paper on Capital Structure, Modigliani and Miller (MM)…

Q: Given the annual interest rate and a line of an amortization schedule for that loan, complete the…

A: To fill the amortisation, we need to calculate monthly interest on balance amount. Interest…

Q: certain central bank from 2000 to from 2000 to 2016 the average price of a new home in a certain…

A: Solution:- Percentage increase means the rise in price in the base price.

Q: How is certificate of deposit beneficial?

A: A certificates of deposit basically are a sort of the financial savings account that holds a sure…

Q: An investment is expected to generate cash flows of $20,000 next year (at time t=1), and $10,000 in…

A: Given: Year Particulars Amount 1 Cash inflows $20,000 2 Cash inflows $10,000 Growth rate…

Q: Compute the NPV for Project M if the appropriate co

A: Net Present Value: It is a measure of absolute profitability applied in the areas of capital…

Q: PLEASE SKIP IF YOU ALREADY ANSWERED. I WILL UPVOTE

A: The question is related to Ratio Analysis. 1. Current Ratio is calculated by dividing Current Assets…

Q: ted average co

A: WACC is calculated by multiplying the cost of each asset source (debt or equity) by the equivalent…

Q: Calculate how much will Sonja have in a savings account 12 years if she deposits RM 3,000 now and RM…

A: Future value of amount includes the amount deposited and interest accumulated over the period of…

Q: a) Consider a project that costs $100 million today and generates a cash flow of $106 million in one…

A: Internal rate of return (IRR) of an alternative refers to the rate at which the Net present value…

Q: Explain certificate of deposit (CD).

A: Money Market Instruments are short term financial instruments which helps in increasing financial…

Q: Chrissy is looking to buy a delivery fee. She is considering the following two credit Financing…

A: Monthly payments refer to the amount which is to be due and paid at a certain period of months for…

Q: What is a primary market?

A: Financial Markets refer to the place where financial assets or securities are being created,…

Q: A company has the following items for the fiscal year 2020: Cash = 2 million Marketable securities =…

A: Current ratio is the short term liquidity ratio calculated by dividing current assets by its current…

Q: You deposit $50,000 into a fund that pays 5% per year compounded annually. You plan to make the…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: Finance What is the commonly used Excel model for bond valuation

A: Bonds are debt instruments. The issuing entity has to pay periodic interest to the bond holders.

Q: Lands End’s total value of capital is $2,000,000. Its cost of equity is 14% and the cost of debt is…

A: Given: Total capital = $2,000,000 Cost of equity = 14% Cost of debt = 10% Equity amount = $500,000…

Concept explainers

Motor Vehicle Insurance

Motor vehicle insurance is a contract between the insurance company that provides insurance cover and the person who owns the vehicle. According to the terms and conditions of the insurance contract, the insurance company reimburses the policyholder for losses and damages. This insurance policy covers the financial risks of the motor vehicle owner. Electronic vehicles are also covered in a vehicle insurance policy, but the insurance rate is relatively higher than other motor vehicle insurance. Motor vehicle insurance is otherwise called an automotive insurance policy.

Question

Please help It’s for a car thing

b) Define deductible.
c) What happens to your premium when the deductible is lowered?
d) List three major factors that are considered when determining the amount of
an insurance quote?
e) Describe a person who might need to pay a lot of money for insurance.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Introduction

Part b explanation

Part c explanation

Part d explanation

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

is an amount one pays out of pocket for an insurance claim before your insurance benefits kick in. An Insurance Deductible Insurance Claim O Insurance premium O Coverage Limit
Which of the following is correct about the effect of a deductible with respect to the price of an insurance policy? O A policy with a deductible will raise the premium. This will make the overall cost of insurance higher for policyholders who do not have a claim, but lower for those with high claims O A policy with a deductible will lower the premium. This will make the overall cost of insurance higher for policyholders who do not have a claim, but lower for those with high claims O A policy with a deductible will raise the premium. This will make the overall cost of insurance lower for policyholders who do not have a claim, but higher for those with high claims O A policy with a deductible will lower the premium. This will make the overal cost of insurance lower for policyholders who do not have a claim, but higher for those with high claims
Discuss the percentage tax applicable to Life Insurance Premiums.
How does life insurance and non life insurance saves the assets of its pilicy holders? And Cite (3) examples.
Which of the following items is required by the Life Insurance and Annuity Replacement Rule? A. A Notice Regarding Replacement of Life Insurance or Annuity B.A Notice Regarding Insurance Producer Compensation Schedule C.A Statement of Ethical Practices D. A Comparative Information form
4. How do insurance companies determine how much you should pay for your insurance coverage?
Which of the following would not be an appropriate subaccount for an Insurance Expense Account? Multiple Choice Auto Insurance Expense. Liability Insurance Expense. Rent Expense. Renter Insurance Expense.
2. Describe "insurance premium" in your own words.
What does the insurer agree to pay for in addition to covering losses in an insurance policy? Services such as investigating claims and defending the insured The entire policy limit Premium costs for the policy period Only losses below the deductible
Explain the differences between actual cash value (ACV) and replacement cost for homeowner’s insurance?
1. Statement 1: If the proceeds of life insurance are held by the insurer under an agreement to pay interest thereon, the interest payments shall be included in gross income. Statement 2: The value of property acquired by gift, bequest, devise or descent, including it fruits and income, shall be excluded from the gross income. a. Both statements are true b. Both statements are false c. Only statement 1 is true d. Only statement 2 is true 2. Case 1: Avy made a total of P5,000 contributions for SSS, Philhealth, Pag-ibig, and union dues. The P5,000 contributions form part of Avy's gross compensation. However, in computing her taxable compensation, such amount must be excluded. Case 2: Avy suddenly got sick and was hospitalized for 1 month. She received a certain amount of benefit from SSS. Her hospital bills were also reduced by her philhealth benefit. The amount received by Nora from SSS and the reduction in her hospital bills constitute taxable compensation to Nora. a. Both…
Explain the differences between a collision deductible and a health insurance deductible. In health insurance how does coinsurance differ from a deductible?