A stipulated insurance policy applies a $5,000 deductible separately to each of three otherwise covered occurrences costing $4,200, $9,100 and $1,100. No other limit or adjustment applies. What total loss amount is retained because of these deductibles?
Correct Answer
D) $10,300
For three separate occurrences, the retained amounts are $4,200, $5,000 and $1,100: total $10,300. A loss below $5,000 does not create a full $5,000 deductible expense.
Why This Is the Correct Answer
For three separate occurrences, the retained amounts are $4,200, $5,000 and $1,100: total $10,300. A loss below $5,000 does not create a full $5,000 deductible expense.
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