North Carolina Adjuster Practice Exam

After Frank's hailstorm damages his $700,000 home, how much should he expect to receive from the insurance company based on his 4% deductible?

1. $14,000

2. $22,000

3. $28,000

4. $50,000

The correct answer is: $22,000

To determine how much Frank should receive from his insurance company after his home is damaged by a hailstorm, we first need to calculate his deductible based on the total value of his home and the percentage specified. Frank's home is valued at $700,000, and he has a deductible of 4%. To find the deductible amount, multiply the home's value by the deductible percentage: \[ \text{Deductible} = \text{Home Value} \times \text{Deductible Percentage} \] \[ \text{Deductible} = 700,000 \times 0.04 = 28,000 \] This means Frank will need to pay the first $28,000 of the damages out of pocket before the insurance coverage kicks in. To find out how much Frank can expect to receive from the insurance company, we subtract the deductible from the total loss amount. If we assume that the total loss from the hailstorm is equal to the value of the home, Frank’s expected payout from the insurer would be: \[ \text{Insurance Payout} = \text{Total Loss} - \text{Deductible} \] \[ \text{Insurance Payout} =