Question

Stephanie has a homeowners insurance policy for her $355,000 home with an annual premium of $0.42 per $100 of value and a deductible of $500. Under this policy, in the event of a major mishap, Stephanie would have a total annual out-of-pocket expense

Answer 1

Under this policy, in the event of a major mishap, Stephanie would have a total annual out-of-pocket expense of $500 which is the deductible of the insurance policy. The out of pocket expense is a cost that a person must pay in order to activate his or her insurance. Based on this policy, there is no copay or coinsurance cost, thus, Stephanie only responsible for paying the deductible.

Answer 2

Answer:

$1,991 will be the total annual out of pocket expenses in the event of a major mishap.

Step-by-step explanation:

The given information is :

Amount of insurance policy = $ 355,000

Annual premium = $ 0.42 per $100

Deductible amount = $ 500

Then the total annual out of pocket expense will be =

$(\frac{355000}{100}\times0.42 )+500$

=> $1491+500$ =$1991                                                  

Therefore, $1,991 will be the total annual out of pocket expenses in the event of a major mishap.