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urgent help needed

TonyArmitage-di
1-Newbie

urgent help needed

Here's my question!

If an insurance company was offering to reduce your premium by $400,000 per year if you were to pay the first $10,000 of any claim would you accept this offer.

So far from the data I have (which I won't provide) I have that

$3,316,463.18 is the total of all claims under $10,000 and there are 134 claims that are $10,000
or over. I don't even know if this helps? I just need a bit of a method to get going?
1 REPLY 1

You need to estimate how much that deductible would cost. So you need to estimate the likely claims in a year. You don't provide a time frame for your data, so you don't provide enough information for the calculation (which is OK -- it's really your calculation anyway). For claims under $10000 you need an estimate of the total amount of such claims. For claims over $10000 you need an estimate of how many (each such claim will cost you $10000 no matter what the actual amount is).

ONce you know the likely cost of the deductible, you can determine if it is more or less than the offered saving.

Tom Gutman
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