Under a deductible, if a 50,000 claim is made with a 10,000 deductible, how much does the insurer pay (assuming no other limits)?

Under a deductible, if a 50,000 claim is made with a 10,000 deductible, how much does the insurer pay (assuming no other limits)?

• A. 0
• B. 40,000
• C. 50,000
• D. 60,000

Answer: (B)

A deductible is the portion of the loss that the insured must pay before the insurer begins to pay. With a 50,000 claim and a 10,000 deductible, the insured covers 10,000 first, and the insurer pays the remaining amount: 50,000 minus 10,000 equals 40,000. Since there are no other limits stated, the insurer pays 40,000. The full 50,000 would occur only if there were no deductible, and a payment of 60,000 would exceed the loss.

A deductible is the portion of the loss that the insured must pay before the insurer begins to pay. With a 50,000 claim and a 10,000 deductible, the insured covers 10,000 first, and the insurer pays the remaining amount: 50,000 minus 10,000 equals 40,000. Since there are no other limits stated, the insurer pays 40,000. The full 50,000 would occur only if there were no deductible, and a payment of 60,000 would exceed the loss.