Personal Auto PolicyQuestion 407 of 474
In one policy year an insured has a $2,000 hail loss and, four months later, a $3,000 collision loss. Deductibles are $250 other than collision and $500 collision. The insurer pays in total:
a.$4,500, applying the $250 deductible to both losses
b.$4,250, applying each coverage's own deductible once
c.$4,750, since the second loss carries no deductible
d.$4,000, applying the $500 deductible to both losses
Explanation
Collision and other than collision are separate coverages with separate deductibles, and each loss is settled on its own. Hail is other than collision: $2,000 - $250 = $1,750. The collision loss pays $3,000 - $500 = $2,500, for $4,250 in all. Applying one deductible to both losses ignores which coverage each cause of loss falls under.
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