Question 113

Frank will receive $45,500 from his insurer.

To determine the amount Frank will receive, we must first calculate the total losses and then apply the deductible. The total damage includes $20,000 for the building, $25,000 for business personal property, and $1,000 for debris removal, leading to total losses of $46,000. After applying the $500 deductible, Frank will receive $45,500.

A) $33,500

This amount is incorrect because it does not account for the total losses incurred by Frank. The calculations should include the total damage of $46,000 minus the $500 deductible, which results in a payout of $45,500.

B) $0

This option is incorrect as it suggests that Frank would receive no compensation for his losses. Given the total insured amounts and the losses incurred, Frank is eligible for a payout after applying the deductible.

C) $19,500

This choice is incorrect because it significantly underestimates the total losses. After calculating the total damage and applying the deductible, the correct amount Frank would receive is $45,500, not $19,500.

D) $45,500

This is the correct answer. By totaling the losses of $46,000 and subtracting the $500 deductible, Frank's net payout from the insurer is accurately calculated at $45,500.

Conclusion

Frank's total losses amount to $46,000, and after the application of the $500 deductible, he is entitled to receive $45,500 from his insurer. Options A, B, and C fail to reflect the accurate calculations based on the coverage limits and deductibles outlined in the policy. Thus, D is the only viable option that correctly represents the payout Frank will receive.