A Palm Harbor insurance file has three covered losses of $6,200, $3,400, $12,800. The deductible is $7,500 per occurrence. What total deductible cost should be tracked administratively?
Correct Answer
A) $17,100
Per-occurrence deductible cost is the lesser of each loss and the deductible, summed across occurrences.
Why This Is the Correct Answer
Per-occurrence deductible cost is the lesser of each loss and the deductible, summed across occurrences.
Why the Other Options Are Wrong
Option B: $22,400
$22,400 is above the supported result for insurance deductible tracking; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $22,500
$22,500 is above the supported result for insurance deductible tracking; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $5,300
$5,300 is below the supported result for insurance deductible tracking; it likely uses the wrong base, period, or account bucket.
Memory Technique
Per-Occurrence and cost live in different drawers; Controller Summarizes tells which opens.
Reference Hint
Open-book path: tab Contractor's Manual, 2025 to Business Administration, Insurance Claims and Deductible Tracking; confirm the administrative duty, record, or control described in the stem.
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