Car Insurance

Premium

100

James’ annual car insurance premium is $2,000. If he chooses to pay monthly, there is a $5 surcharge per payment. What is his monthly payment?

Annual premium = $2,000

Monthly premium without surcharge = $2,000 ÷ 12 = $166.67

Surcharge per payment = $5

Monthly payment = $166.67 + $5 = $171.67

200

Emily's annual car insurance premium is $1,800. If she opts to pay quarterly and there’s a $3 fee per payment, how much will she pay each quarter?

Annual premium = $1,800

Quarterly premium without surcharge = $1,800 ÷ 4 = $450

Surcharge per payment = $3

Quarterly payment = $450 + $3 = $453

300

Robert’s annual car insurance premium is $1,200. If he decides to pay semi-annually without any additional fees, what will his semi-annual payment be?

Annual premium = $1,200

Semi-annual payment = $1,200 ÷ 2 = $600

400

Linda’s annual premium for car insurance is $2,400. If she chooses to pay monthly, and there is a $4 surcharge per payment, what will her monthly payment amount be?

Annual premium = $2,400

Monthly premium without surcharge = $2,400 ÷ 12 = $200

Surcharge per payment = $4

Monthly payment = $200 + $4 = $204

500

Tom’s annual car insurance premium is $900. If he elects to pay quarterly, and there's a $1 surcharge per payment, what is his quarterly payment?

Annual premium = $900

Quarterly premium without surcharge = $900 ÷ 4 = $225

Surcharge per payment = $1

Quarterly payment = $225 + $1 = $226

Liability

100

Mark has $75,000 in property damage liability insurance. He caused an accident that damaged a $5,200 mailbox and $15,000 worth of damage to another vehicle. How much will Mark have to pay for the damages?

Total damage: $5,200 (mailbox) + $15,000 (car) = $20,200

Mark’s insurance covers up to $75,000, and the total damage ($20,200) is less than that amount, so the insurance will cover all the damages.

200

Susan has $5,000 in property damage liability insurance. She was involved in an accident that caused $3,000 in damage to a fence and $8,000 worth of damage to another car. How much will Susan need to pay?

Total damage: $3,000 (fence) + $8,000 (car) = $11,000

Susan’s insurance covers up to $5,000, and the total damage ($11,000) is more than that amount, so the insurance will cover only $5,000. Susan will pay the remaining $6,000.

300

Jacob has $20,000 in property damage liability insurance. He caused an accident that resulted in $10,000 worth of damage to a tree and $12,500 in damage to another vehicle. How much does Jacob need to pay for the damages?

Total damage: $10,000 (tree) + $12,500 (car) = $22,500

Jacob’s insurance covers up to $20,000, and the total damage ($22,500) is more than that amount, so the insurance will cover $20,000 of the damages. Jacob will pay the remaining $2,500.

400

Kevin has $40,000 in property damage liability insurance. He caused an accident that resulted in $14,000 worth of damage to a fence and $27,000 in damage to another car. How much does Kevin have to pay?

Total damage: $14,000 (fence) + $27,000 (car) = $41,000

Kevin’s insurance covers up to $40,000, and the total damage ($41,000) exceeds the coverage. The insurance will pay $40,000, and Kevin will have to pay the remaining $1,000

500

Olivia has $30,000 in property damage liability insurance. She was in an accident that caused $8,000 worth of damage to a street sign and $18,500 in damage to another car. How much will Olivia have to pay?

Total damage: $8,000 (street sign) + $18,500 (car) = $26,500

Olivia’s insurance covers up to $30,000, and the total damage ($26,500) is less than that amount, so the insurance will cover all the damages.

Bodily Injury

100

Ryan has bodily injury liability insurance with limits of 100/300. He causes an accident that injures two people. One person is awarded $180,000, and the other person is awarded $130,000. How much will Ryan's insurance cover? How much will Ryan be responsible for?

• Bodily injury liability limits = 100/300
• First person = $180,000
• Second person = $130,000
• The total injury claims = $180,000 + $130,000 = $310,000
• Ryan’s insurance has a per-person limit of $100,000 and a total limit of $300,000.
• First person: The insurance will cover $100,000 (per-person limit).
• Second person: The insurance will cover $100,000 (per-person limit).
• Ryan's insurance covers $200,000 in total. The remaining $110,000 ($310,000 - $200,000 covered) is out of pocket for Ryan.

200

Sarah has 250/500 bodily injury liability insurance. She causes an accident that injures three people. One person is awarded $120,000, the second person is awarded $190,000, and the third person is awarded $80,000. How much will Sarah's insurance cover?

• Sarah’s insurance has a per-person limit of $250,000 and a total limit of $500,000.
• First person: The insurance will cover $120,000.
• Second person: The insurance will cover $190,000.
• Third person: The insurance will cover $80,000 (since total claims are less than the total limit).
  Answer: $390,000 (Sarah’s insurance covers the full $390,000).

300

Jason has 50/150 bodily injury liability insurance. He causes an accident that injures four people. The first person is awarded $80,000, the second person is awarded $40,000, the third person is awarded $30,000, and the fourth person is awarded $10,000. How much will Jason’s insurance pay?

• The total injury claims = $80,000 + $40,000 + $30,000 + $10,000 = $160,000
• Jason’s insurance has a per-person limit of $50,000 and a total limit of $150,000.
• First person: The insurance will cover $50,000 (per-person limit).
• Second person: The insurance will cover $40,000 (per-person limit).
• Third person: The insurance will cover $30,000 (per-person limit).
• Fourth person: The insurance will cover $10,000 (reaches total limit).
  -Jason's insurance covers $130,000 total. He needs to cover the rest.

400

Linda has 200/400 bodily injury liability insurance. She causes an accident that injures two people. One person is awarded $120,000, and the second person is awarded $230,000. How much will Linda’s insurance cover? How much will Linda pay?

• Bodily injury liability limits = 200/400
• First person = $120,000
• Second person = $230,000
• The total injury claims = $120,000 + $230,000 = $350,000
• Linda’s insurance has a per-person limit of $200,000 and a total limit of $400,000.
• First person: The insurance will cover $120,000.
• Second person: The insurance will cover $200,000 (per-person limit).
• Total claims = $120,000 + $200,000 = $320,000 (under total limit).
  Answer: $320,000 (Linda's insurance covers $320,000 total).

500

Kyle has 150/300 bodily injury liability insurance. He causes an accident that injures five people. The first person is awarded $90,000, the second person is awarded $40,000, the third person is awarded $50,000, the fourth person is awarded $40,000, and the fifth person is awarded $20,000. How much will Kyle's insurance cover?

• Bodily injury liability limits = 150/300
• First person = $90,000
• Second person = $40,000
• Third person = $50,000
• Fourth person = $40,000
• Fifth person = $20,000
• The total injury claims = $90,000 + $40,000 + $50,000 + $40,000 + $20,000 = $240,000
• Kyle’s insurance has a per-person limit of $150,000 and a total limit of $300,000.
• First person: The insurance will cover $90,000.
• Second person: The insurance will cover $40,000.
• Third person: The insurance will cover $50,000.
• Fourth person: The insurance will cover $40,000.
• Fifth person: The insurance will cover $20,000 (reaches total limit).
  Answer: $240,000 (Kyle's insurance covers $240,000 total).

Deductible

100

Ethan has a collision insurance policy with a $500 deductible. He crashes into a tree, causing $3,000 worth of damage to his car. How much will Ethan's insurance company cover?

• Deductible = $500
• Damage = $3,000
• Insurance payout = $3,000 - $500 = $2,500

200

Jessica has a $1,000 deductible for her collision insurance. She backs into a dumpster, resulting in $4,200 worth of damage to her car. How much will Jessica’s insurance pay?

• Deductible = $1,000
• Damage = $4,200
• Insurance payout = $4,200 - $1,000 = $3,200

300

Ryan has collision insurance with a $750 deductible. He gets into an accident, and the total damage to his car is $6,500. How much will Ryan’s insurance company cover?

• Deductible = $750
• Damage = $6,500
• Insurance payout = $6,500 - $750 = $5,750

400

Chloe has a $1,500 deductible for collision insurance. She crashes into a fence, causing $7,800 worth of damage to her car. How much will Chloe's insurance company pay?

• Deductible = $1,500
• Damage = $7,800
• Insurance payout = $7,800 - $1,500 = $6,300

500

Brian has a $200 deductible for his collision insurance. He damages his car by running into a guardrail, causing $1,500 in damage. How much will Brian’s insurance company cover?

• Deductible = $200
• Damage = $1,500
• Insurance payout = $1,500 - $200 = $1,300

Vocabulary

100

A percentage of the sales price paid to the government for sales of products and services.

sales tax

200

To decrease in value.

depreciate

300

Amount you must pay before you begin receiving any benefits from your insurance company.

deductible

400

Amount you pay monthly, quarterly, semiannually or annually to purchase different types of insurance.

premium

500

A publication that provides specific information about the value of vehicles, including wholesale and retail value, and the value of mileage and options.

Kelley Blue Book