Question

Auto insurance options offered by AA Auto Insurance are outlined in the table below. What monthly payment would you expect for an insurance policy through AA Auto Insurance with the following options?
Bodily Injury: $25/50,000
Property Damage: $25,000
Collision: $250 deductible
Comprehensive: $100 deductible

AA Auto Insurance
Type of Insurance Coverage
Coverage Limits
Annual Premiums
Bodily Injury
$25/$50,000
$22.50

$50/100,000
$31.75

$100/300,000
$40.25

Property Damage
$25,000
$120.50

$50,000
$144.75

$100,000
$193.00

Collision
$100 deductible
$520.00

$250 deductible
$415.25

$500 deductible
$275.75

Comprehensive
$50 deductible
$110.25

$100 deductible
$100.00

a.
$43.23
b.
$46.10
c.
$54.85
d.
$64.44

Answer 1

Sum the annual premiums, then divide by 12.

22.50 (Bodily Injury) + 120.50 (Property) + 415.25 (Collision) + 100.00 (Comprehensive) = 658.25 annual

658.25 / 12 = 54.85

Answer: c. $54.85