To determine the owner's out-of-pocket cost for the repair in Event 2, we need to consider the deductible specified in the insurance policy. The deductible is the amount the insured party must pay before the insurance company covers the remaining expenses.
Here are the steps to solve the problem:
1. Identify the deductible amount.
- The deductible is [tex]$1,000.00.
2. Identify the repair cost for Event 2.
- The repair cost for Event 2 (property damage) is $[/tex]1,800.00.
3. Determine the out-of-pocket cost.
- The out-of-pocket cost is the lesser value between the repair cost and the deductible. Here, we compare [tex]$1,800.00 with $[/tex]1,000.00.
Since the deductible is [tex]$1,000.00 and it is less than the repair cost of $[/tex]1,800.00, the owner's out-of-pocket cost will be the amount of the deductible, which is [tex]$1,000.00.
Thus, the owner's out-of-pocket cost for the repair in Event 2 is $[/tex]1,000.00. The remaining cost, which is [tex]$800.00 ($[/tex]1,800.00 - $1,000.00), will be covered by the insurance.
