The annual insurance premium for a car Nicole bought 6 months ago is $756.00 with a $500 deductible for collision. Nicole had just paid the bill for her sixth month of insurance before she was involved in a car accident resulting in $2,000 in damage to her car. Because she had collision insurance in her policy, the insurance company took care of all of the repairs less the $500.00 deductible. Considering how much she paid in insurance premiums and deductibles, would you say the purchase of insurance over the last 6 months was a good investment for Nicole? Why or why not?

Question

Sabrina Bradshaw

Mathematics

20 August, 19:34

The annual insurance premium for a car Nicole bought 6 months ago is $756.00 with a $500 deductible for collision. Nicole had just paid the bill for her sixth month of insurance before she was involved in a car accident resulting in $2,000 in damage to her car. Because she had collision insurance in her policy, the insurance company took care of all of the repairs less the $500.00 deductible. Considering how much she paid in insurance premiums and deductibles, would you say the purchase of insurance over the last 6 months was a good investment for Nicole? Why or why not?

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Answers (1)

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Milo Wong · Answer 1

Let's gather together our facts.

Insurance (Annual) - 756.00

Deductible - 500

Damage - 2000

Ins-saving - 1500

Insurance base cost for 6 months is 756/2 = 378

Add the Deductible 500 + 378 = 878

Cost without insurance = 2000

I would say that the insurance was a very good investment. Nicole saved $1122.00