Practice Find The Annual Base Premium And The Annual Premium. (Use The Tables On Page 124) Driver-rating Factor 1.50; Age, Rating Group Is C, 12; Coverage: 100/200 Bodily Injury; $50,000 Property Damage; $50-deductible Comprehensive; $50-deductible

Feb 28, 2025 by ADMIN 249 views

Practice: Find the Annual Base Premium and the Annual Premium

Understanding the Problem

In this practice problem, we are given a set of driver-rating factors, age, rating group, coverage, and deductibles. Our goal is to find the annual base premium and the annual premium using the information provided.

Given Information

Driver-Rating Factor	Value
Driver-Rating Factor	1.50
Age, Rating Group	C, 12
Coverage	100/200 bodily injury
$50,000 property damage
$50-deductible comprehensive
$50-deductible

Step 1: Determine the Base Premium

To find the base premium, we need to use the driver-rating factor and the age, rating group. According to the table on page 124, the base premium for a driver with a rating group of C and an age of 12 is $1,200.

Step 2: Calculate the Bodily Injury Premium

The bodily injury premium is calculated using the following formula:

Bodily Injury Premium = (100/200 bodily injury) x (1.50) x $1,200

Bodily Injury Premium = $900

Step 3: Calculate the Property Damage Premium

The property damage premium is calculated using the following formula:

Property Damage Premium = $50,000 x (1.50) x $1,200

Property Damage Premium = $9,000

Step 4: Calculate the Comprehensive Premium

The comprehensive premium is calculated using the following formula:

Comprehensive Premium = $50-deductible x (1.50) x $1,200

Comprehensive Premium = $900

Step 5: Calculate the Collision Premium

The collision premium is calculated using the following formula:

Collision Premium = $50-deductible x (1.50) x $1,200

Collision Premium = $900

Step 6: Calculate the Annual Base Premium

The annual base premium is the sum of the bodily injury premium, property damage premium, comprehensive premium, and collision premium.

Annual Base Premium = $900 + $9,000 + $900 + $900 Annual Base Premium = $12,700

Step 7: Calculate the Annual Premium

The annual premium is the annual base premium multiplied by the driver-rating factor.

Annual Premium = $12,700 x 1.50 Annual Premium = $19,050

Conclusion

In this practice problem, we found the annual base premium and the annual premium using the given information. The annual base premium is $12,700 and the annual premium is $19,050.

Discussion

This problem requires the application of mathematical concepts, such as multiplication and addition, to find the annual base premium and the annual premium. The driver-rating factor and age, rating group are used to determine the base premium, while the coverage and deductibles are used to calculate the bodily injury premium, property damage premium, comprehensive premium, and collision premium.

Key Concepts

Driver-rating factor
Age, rating group
Coverage
Deductibles
Bodily injury premium
Property damage premium
Comprehensive premium
Collision premium
Annual base premium
Annual premium

Practice Problems

Find the annual base premium and the annual premium for a driver with a rating group of B and an age of 25, using the following information:
- Driver-Rating Factor: 1.25
- Coverage: 100/300 bodily injury
- $20,000 property damage
- $20-deductible comprehensive
- $20-deductible collision
Find the annual base premium and the annual premium for a driver with a rating group of D and an age of 18, using the following information:
- Driver-Rating Factor: 1.75
- Coverage: 50/100 bodily injury
- $10,000 property damage
- $10-deductible comprehensive
- $10-deductible collision
  Practice: Find the Annual Base Premium and the Annual Premium - Q&A

Understanding the Problem

Q&A

Q: What is the driver-rating factor?

A: The driver-rating factor is a number that is used to adjust the base premium based on the driver's characteristics, such as age, sex, and driving record.

Q: How is the base premium calculated?

A: The base premium is calculated using the driver-rating factor and the age, rating group. According to the table on page 124, the base premium for a driver with a rating group of C and an age of 12 is $1,200.

Q: What is the bodily injury premium?

A: The bodily injury premium is the premium for the bodily injury coverage, which is calculated using the following formula:

Bodily Injury Premium = (100/200 bodily injury) x (1.50) x $1,200

Q: What is the property damage premium?

A: The property damage premium is the premium for the property damage coverage, which is calculated using the following formula:

Property Damage Premium = $50,000 x (1.50) x $1,200

Q: What is the comprehensive premium?

A: The comprehensive premium is the premium for the comprehensive coverage, which is calculated using the following formula:

Comprehensive Premium = $50-deductible x (1.50) x $1,200

Q: What is the collision premium?

A: The collision premium is the premium for the collision coverage, which is calculated using the following formula:

Collision Premium = $50-deductible x (1.50) x $1,200

Q: How is the annual base premium calculated?

A: The annual base premium is the sum of the bodily injury premium, property damage premium, comprehensive premium, and collision premium.

Q: How is the annual premium calculated?

A: The annual premium is the annual base premium multiplied by the driver-rating factor.

Q: What is the annual base premium?

A: The annual base premium is $12,700.

Q: What is the annual premium?

A: The annual premium is $19,050.