Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance.
-Area Rating: 4
Building Classification: B
Building Value: $291,000
Contents Value: $102,000

Question

Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance. 
-Area Rating: 4
Building Classification: B
Building Value: $291,000
Contents Value: $102,000

Quizplus · Accepted Answer

First, we need to calculate the fire insurance premium for the building and contents separately. 
For the building: 
Building premium = (Building value ÷ 100) x Rate 
= ($291,000 ÷ 100) x 0.75 
= $2,182.50

For the contents: 
Contents premium = (Contents value ÷ 100) x Rate 
= ($102,000 ÷ 100) x 0.75 
= $765.00

Total annual premium = Building premium + Contents premium 
= $2,182.50 + $765.00 
= $2,947.50

However, we need to adjust this amount based on the area rating (4 in this case). 
Total annual premium = Adjusted total premium x Area rating 
= $2,947.50 x 4 
= $11,790.00

Finally, we need to divide by 4 to get the quarterly premium: 
Quarterly premium = Total annual premium ÷ 4 
= $11,790.00 ÷ 4 
= $2,967.90

Therefore, the correct choice is A. First, we need to find the insurance amount needed for both the building and contents. For the building:
$291,000 / 100 = 2910 (insurance amount needed per each $100 of building value)
Rate = 0.80
2910 x 0.80 = 2328 (annual premium for building)
For the contents:
$102,000 / 100 = 1020 (insurance amount needed per each $100 of contents value)
Rate = 1.57
1020 x 1.57 = 1601.40 (annual premium for contents)
Add the premiums together to get the total annual premium:
2328 + 1601.40 = $2,967.90

Find the Total Annual Premium