Exam P Practice Question 1
Study guide: Exam P-1
A policyholder's homeowners policy has the following terms:
- a deductible of 1,000 per loss,
- the insurer pays 80% of the loss in excess of the deductible, and
- the insurer's payment on any one loss is capped at a maximum payment of 8,000.
The policyholder suffers a loss of 12,000 and submits a claim to the insurer.
Calculate the amount of this loss that the policyholder retains (does not recover from the insurer).
- A) 1,000
- B) 3,200
- C) 4,000
- D) 6,400
- E) 8,000
Answer this question and see the worked solution