Exam DISC-IA Practice Question 21
Study guide: Exam DISC-IA
An insurer wrote an annual homeowners policy on July 1 for $1,800. A covered fire occurred on December 10; by December 31 the insurer has paid $4,000 of a loss it estimates at $10,000. What statutory liabilities does the insurer carry for this policy at December 31?
- A) Unearned premium of $900, less the $6,000 still unpaid on the fire
- B) No unearned premium, because the loss used it up, and $6,000 of loss reserve
- C) Unearned premium of $900 and a loss reserve of $10,000
- D) Unearned premium of $900 and a loss reserve of $6,000
Answer this question and see the worked solution