1. Auto Insurance Day 3
Notebook page 42

2. 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?

4. 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?

5. 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 = $ 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑝𝑎𝑦𝑚𝑒𝑛𝑡
r = 2.45
b = 370

6. 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, 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?

7. 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, 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 = ∗ , 𝑷 = $𝟏𝟗𝟔.𝟓𝟎