Auto Insurance Day 3 Notebook page 42

Example 1 Archie is 17 years old with driver training. He is single and is not the owner or principle operator of the car. He does run errands, but does not use it to drive to work. What is Archie’s Driver Rating Factor?

Ex. 2 Archie is driving the family car which has a car class AUTOMOBILE INSURANCE, SIX-MONTH BASIC RATE SCHEDULE Car Class Rating Collision Deductible Comprehensive deductible   $100 $250 $500 $50 1-10 $430 $370 $140 $130 $110 11-20 820 750 690 350 310 280 21-30 1140 1040 940 450 410 370 31-40 1280 1190 1100 670 610 560 Archie is driving the family car which has a car class rating of 8. He plans to purchase collision insurance with a deductible of $500. What is the annual premium? What is the monthly payment?  

Ex. 2 Archie is driving the family car which has a car class AUTOMOBILE INSURANCE, SIX-MONTH BASIC RATE SCHEDULE Car Class Rating Collision Deductible Comprehensive deductible   $100 $250 $500 $50 1-10 $430 $370 $140 $130 $110 11-20 820 750 690 350 310 280 21-30 1140 1040 940 450 410 370 31-40 1280 1190 1100 670 610 560 Archie is driving the family car which has a car class rating of 8. He plans to purchase collision insurance with a deductible of $500. What is the annual premium? What is the monthly payment?   Annual Insurance Premium Formula: P = 2rb p = annual premium paid to the company r = driver rating factor b = six-month basic rate for the car. 𝑃 = 2(2.45)(370) = $1813 𝑎 𝑦𝑒𝑎𝑟 1813 12 = $151.08 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑝𝑎𝑦𝑚𝑒𝑛𝑡 r = 2.45 b = 370

Ex. 3 An insurance company in considering a new policy for young people aged 14 and 15. The policy will insure them for injuries sustained as a passenger riding in a car. The insurance company must decide on the price of a premium. Their records show that for every 10,000 14 and 15 year old passengers, there are 425 accidents resulting in personal injuries. The medical costs of these injuries average $3,800 per person. The company must also receive $35 per policy to cover overhead and profit. What should the premium be for the new policy?  

Ex. 3 An insurance company in considering a new policy for young people aged 14 and 15. The policy will insure them for injuries sustained as a passenger riding in a car. The insurance company must decide on the price of a premium. Their records show that for every 10,000 14 and 15 year old passengers, there are 425 accidents resulting in personal injuries. The medical costs of these injuries average $3,800 per person. The company must also receive $35 per policy to cover overhead and profit. What should the premium be for the new policy? 𝑃 = 𝑒 𝑛 +ℎ   e = 425 accidents at $3800 each n = 10,000 h= $35   𝑃 = 425 ∗ 3800 10,000 + 3 𝑷 = $𝟏𝟗𝟔.𝟓𝟎