Can someone please answer this multiple choice question?

[fed up]

None of the above. Dennis's car was a piece of dung with torn seats, a broken windshield, a siezed motor and rust all around

 

[Markthebroker]

You guys, stop joking around. He's never going to pass his exam if no one tells him the answer.

 

[goillini52]

Dennis submits a motor claim for US$500 but only receives US$450 as a settlement. The insurer is most likely to have deducted a(n):
(a) Deductible
(b) Excess
(c) Discount
(d) Average?

Is this question on the AHIP test?

 

[DHK]

I'm so glad that no one is telling him the answer!

Of course, the incompetent always look for outside help when they can't pass the exam(s).
Risking it all to have “LUTCF” after your name.

 

[Allen Trent]

I would go with C because I believe a deductible is subtracted from the settlement, meaning his check might be $200 if he has a $250 Bitcoin deductible. Now, by filing the claim & receiving $200, his rates for the next 3 years will adjust & he will send back about $700 of the $200 he got.

 

[marindependent]

Is that a real question on a real test? If it is I wonder what country the writer came from.

Americans don't refer to a car as a motor. The British do. Even if we substituted car for motor in that question, it still wouldn't make sense because we'd have to know what kind of claim and to whom it was submitted. We also don't put the letters US in front of money because we are in the US and it's understood by 300,000,000+ Americans that we are talking about US dollars and not some foreign currency.

And I can't imagine that the answer could be deductible because there hasn't been a $50 deductible on US auto insurance policies since probably the 1940s.

Totally agree. Although just becuase a $50 deductible has not been used in a long time does not mean that your state DOI took the number out of the question rotation. There are still some dozzies in there.

 

[LostDollar]

And I can't imagine that the answer could be deductible because there hasn't been a $50 deductible on US auto insurance policies since probably the 1940s.

Not true, at least for collision and comprehensive.

 

[LostDollar]

Totally agree. Although just becuase a $50 deductible has not been used in a long time does not mean that your state DOI took the number out of the question rotation. There are still some dozzies in there.

The amount is irrelevant. It is a concept question. It highlights a basic concept that both sellers and buyers of insurance (health insurance as well as property insurance) need to understand.

chazm has spent an inordinate amount of effort in getting me to understand the distinction between the correct answer to this question and another common health insurance term.

 

[LostDollar]

(And the answer to the question is contained in comments on Page 11 of the 2014 ExamFX P&C exam manual for Kansas.)

 

[adjusterjack]

I was hoping that my reference to the 1940s would be recognized as a bit facetious.

I guess I'll go back to referring to the stone age.