Acasa Insurance Company offers two plans for home insurance. Plan A has a $750 yearly premium with a $3,000 deductible. Plan B has a $1,200 yearly premium with a $1,000 deductible. Last year, 20% of all policyholders made damage claims. The average claim amount was $6,500.The expected value per claim for every customer who chooses plan B is $___The expected value per claim for every customer who chooses plan A is $___
Question
Answer:
Plan A Cust Cost = 3000 deductible + 750 yearly premium = $3750
Acasa Cost = 6500 claim -3000 cust deductible -$750 cust yearly premium = $2750 cost to Acasa.
Plan B
Cust Cost = 1000 deductible + 1200 yearly premium = $2200
Acasa Cost = 6500 claim - 1000 cust deductible - 1200 cust yearly premium = $4300 cost to Acasa.
answer
The expected value per claim for every customer who chooses plan B is $4300
The expected value per claim for every customer who chooses plan A is $2750
solved
general
11 months ago
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