Question

John has an auto which is covered for collision losses subject to a $250 deductible. Kate's auto also has collision coverage but her deductible is $500. How would a $2,000 collision loss be paid if it occurs when John borrows Kate's car because his car is in the shop for repairs?

Answer 1

Answer:

Kate policy will pay 1500 dollars while Johns policy will pay  250 dollars

Explanation:

kates policy will pay 1500 dollars while johns policy will pay 250 dollars.

Since Kates deductible is 500 dollars, this deductible will be subtracted from the 2000 dollars collission loss that occurred when John borrowed her car. which gives $1500. therefore her policy will get to pay 1500 dollars. while johns policy will have to pay $250