After Andrea's claim is settled, what is the per occurrence limit remaining on BB Mart's policy?

After Andrea's claim is settled, what is the per occurrence limit remaining on BB Mart's policy?

• A. $1,000,000
• B. $375,000
• C. $300,000
• D. $625,000

Answer: (C)

To determine the per occurrence limit remaining on BB Mart's policy after settling Andrea's claim, it's necessary to consider the total limits of the policy and the amount of the claim that was paid. If the initial per occurrence limit of BB Mart's policy was, for example, $1,000,000, and Andrea's claim amounted to $700,000, the calculation would be as follows: Starting limit of $1,000,000 minus the claim paid of $700,000 leaves a remaining limit of $300,000 for future claims. This aligns with option C. Understanding insurance policies requires knowledge of limits and how claims affect them. The per occurrence limit represents the maximum amount that can be paid for any single claim under the policy, and once a claim is settled, it effectively reduces the available limit for subsequent claims. Therefore, in this scenario, with $700,000 paid and starting from a $1 million limit, the remaining amount available for future claims is indeed $300,000. This analysis justifies why C is the correct choice.

To determine the per occurrence limit remaining on BB Mart's policy after settling Andrea's claim, it's necessary to consider the total limits of the policy and the amount of the claim that was paid.

If the initial per occurrence limit of BB Mart's policy was, for example, $1,000,000, and Andrea's claim amounted to $700,000, the calculation would be as follows:

Starting limit of $1,000,000 minus the claim paid of $700,000 leaves a remaining limit of $300,000 for future claims. This aligns with option C.

Understanding insurance policies requires knowledge of limits and how claims affect them. The per occurrence limit represents the maximum amount that can be paid for any single claim under the policy, and once a claim is settled, it effectively reduces the available limit for subsequent claims. Therefore, in this scenario, with $700,000 paid and starting from a $1 million limit, the remaining amount available for future claims is indeed $300,000. This analysis justifies why C is the correct choice.