2. Jack (born on April 27, 1964) has coverage for his son, Pete (born on May 25,

Question

2. Jack (born on April 27, 1964) has coverage for his son, Pete (born on May 25, 1990), provided by his employer with an 80 percent coinsurance provision and a $100 deductible. Jack’s wife, Elizabeth (born on November 3, 1967), also has dependent coverage provided by her employer with an 80 percent coinsurance provision and a $250 deductible. Pete suffers a $5000 loss that is covered by both policies. Assuming that the 1985 NAIC rules are in effect, Elizabeth’s insurer will pay

a.$3800,

b.$1080,

c.$0,

d.$1200.

Explanation / Answer

answer is option A $3800

Loss = 5000

deductible amount = 250

Elizabeth’s insurer will pay = (5000-250)*0.80 = 3800

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