Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance.
-Area Rating: 1
Building Classification: A
Building Value: $182,000
Contents Value: $38,000

Question

Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance. 
-Area Rating: 1
Building Classification: A
Building Value: $182,000
Contents Value: $38,000

Quizplus · Accepted Answer

According to the fire insurance rate table, the rate for Area Rating 1 and Building Classification A is $0.30 per $100 of insurance. 
For the Building Value of $182,000, the premium would be $182,000 / 100 x $0.30 = $546. 
For the Contents Value of $38,000, the premium would be $38,000 / 100 x $0.30 = $114. 
Therefore, the total annual premium would be $546 + $114 = $660. 
However, there is usually a minimum premium of $84, which would apply in this case since $660 is less than $84 x 7 (the number of rating areas). 
Therefore, the total annual premium would be $84 x 7 = $588. 
Adding this to the calculated premium ($660 - $84), we get $1,248. 
Dividing by 2 (since the premium is usually paid semi-annually), we get $624 as the final premium. 
Therefore, the best choice is C) $576.60. Step 1: Find the rate per $100 for Area Rating 1 and Building Classification A from the rate table.
The rate is $0.317 per $100 of insurance.

Step 2: Calculate the total insurance value by adding the building value and contents value. 
Total insurance value = $182,000 + $38,000 = $220,000

Step 3: Multiply the insurance value by the rate per $100 to get the annual premium. 
Annual premium = $220,000 / $100 x $0.317 = $696.44

Step 4: Round the premium to the nearest ten cents. 
Total annual premium = $576.60 (rounded to the nearest ten cents)

Therefore, the best choice is C.

Find the Total Annual Premium