About 1 in 7 US drivers are uninsured. This number varies quite a bit by region. In some
areas, 1 in 4 drivers do not have insurance. So when you bought your policy (which costs
$1,100 per year and has a $1,000 deductible), you made sure it included coverage for
uninsured drivers. Your policy provides $25,000 per person in your car for injuries and up to
$50,000 per accident with an uninsured driver. Assume that the average accident rate for all
types of accidents combined is 0.08.
Question 1
Suppose your insurance company has 120,000 policies just like yours. What is the company's
total income from the premiums?