CAS Exam 5 Spring 2015, Question 1
Study guide: Exam 5
Given the following information for an ISO Personal Automobile Policy:
| Primary Classification | Factor |
|---|---|
| Pleasure use | 1.00 |
| Work less than 15 miles | 1.07 |
| Work 15 or more miles | 1.18 |
| Farm use | 0.82 |
| Business use | 1.25 |
| Secondary Classification | Factor |
|---|---|
| 0 | 0.30 |
| 1A | 0.70 |
| 1B | 0.75 |
| 2 | 1.20 |
| 3 | 1.80 |
| 4 | 2.50 |
- The policy has one 30-year-old driver who uses the vehicle to commute 10 miles to work one day per week.
- The driver has been licensed for more than two years and has no driving record points.
- The policy term is one year.
- The total premium is $1,480.
- The expense fee is $80 per policy.
- The policy coverages are Bodily Injury Liability and Property Damage Liability only.
- Only auto usage and safe driver insurance plan (SDIP) are used to determine primary and secondary classification.
- The policy is a single-car policy.
At six months into the policy term, a second driver is added as an operator with the following characteristics:
- 17 years old.
- Has been licensed for less than two years.
- Has 2 driving record points.
- Uses the vehicle 3 days per week to commute 10 miles to school.
Calculate the premium change in dollars for adding the new driver to the policy for the remainder of the policy term.
Part a (1.5 points)
Answer this question and see the worked solution