Melvin has an auto insurance policy that includes both collision and comprehensive coverage.He has a $250 deductible on his collision coverage and a $100 deductible on his comprehensive coverage.His car has a book value of $7,500 when he is in a one-car accident with a tree.The car suffers damages of $5,000.How much will Melvin's insurance company pay for this repair work?
A)$4,750
B)$4,900
C)$7,400
D)$7,250

Question

Quizplus · Accepted Answer

Since Melvin hit a tree, it's considered a collision. The insurance will cover the repair costs minus the deductible for collision coverage. Therefore, the insurance will pay $5,000 (damage) - $250 (deductible) = $4,750.

Melvin Has an Auto Insurance Policy That Includes Both Collision