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Use the driver-rating factor table and the 6-month basic rate schedule for an automobile insurance policy to answer the question.

DRIVER-RATING FACTOR TABLE
| Age | Sex | Owner or Usual Driver | Drive to Work | Rating Factor |
|-------|-------|-----------------------|---------------|---------------|
| 25-29 | Both | Yes | Yes | 1.85 |
| | | | No | 1.50 |
| 30-49 | Both | Yes | Yes | 1.25 |
| | | | No | 1.00 |
| 50-64 | Both | Yes | Yes | 1.15 |
| | | | No | 0.90 |
| 65+ | Both | Yes | Yes | 1.05 |
| | | | No | 0.30 |

SIX-MONTH BASIC RATE SCHEDULE
| Car Class Rating | Collision Deductible [tex]$100 | Collision Deductible $[/tex]250 | Collision Deductible [tex]$500 | Comprehensive Deductible $[/tex]50 | Comprehensive Deductible [tex]$250 | Comprehensive Deductible $[/tex]500 |
|------------------|---------------------------|---------------------------|---------------------------|------------------------------|-------------------------------|-------------------------------|
| 1-10 | [tex]$500 | $[/tex]430 | [tex]$370 | $[/tex]140 | [tex]$130 | $[/tex]110 |
| 11-20 | [tex]$820 | $[/tex]750 | [tex]$690 | $[/tex]350 | [tex]$310 | $[/tex]280 |
| 21-30 | [tex]$1140 | $[/tex]1040 | [tex]$940 | $[/tex]450 | [tex]$410 | $[/tex]370 |
| 31-40 | [tex]$1280 | $[/tex]1190 | [tex]$1100 | $[/tex]670 | [tex]$610 | $[/tex]560 |

Sue is 43 years old, owns her car, and takes the bus to work. Her collision deductible is [tex]$250, and she does not have comprehensive coverage. Her car's safety rating is 22.

What is her annual premium?

A. $[/tex]1040
B. [tex]$2080
C. $[/tex]1500
D. $2600



Answer :

GinnyAnswer
To determine Sue's annual premium for her automobile insurance, let’s follow a step-by-step process using the provided information.

1. Identify the Rating Factor:
- Age Group: Sue is 43 years old, which places her in the 30-49 age group.
- Ownership: Sue owns her car.
- Commute to Work: Sue takes the bus to work, so she does not drive her car to work.
- Rating Factor: According to the driver-rating factor table, a person in the 30-49 age group who owns their car but does not drive to work has a rating factor of [tex]\( 1.00 \)[/tex].

2. Identify the Basic Rate for Collision Coverage:
- Car Class Rating: Sue’s car has a safety rating of 22.
- Collision Deductible: Sue’s collision deductible is [tex]$250. - The basic rate schedule for a car class rating of 21-30 with a collision deductible of $[/tex]250 is \[tex]$1040 for a 6-month period. 3. Calculate the 6-Month Premium: - 6-Month Premium Calculation: Multiply the basic rate by the rating factor. - \[ \text{6-Month Premium} = 1.00 \times 1040 = \$[/tex]1040
\]

4. Calculate the Annual Premium:
- Annual Premium Calculation: The annual premium is twice the 6-month premium.
- [tex]\[ \text{Annual Premium} = 1040 \times 2 = \$2080 \][/tex]

Thus, Sue's annual premium is [tex]\( \$2080 \)[/tex].

Answer: B. \$2080

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