Louisiana P&C Adjuster Practice Exam

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Study for the Louisiana Pandamp;C Adjuster Exam. Utilize flashcards and multiple choice questions, each question comes with hints and explanations. Prepare confidently for your exam!

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If a homeowner named Ted has a hurricane deductible of 2% on a $500,000 home, how much is his hurricane deductible?

$5,000
$10,000
$7,500
$2,500

The correct answer is: $10,000

To calculate Ted's hurricane deductible, you take the home's insured value, which is $500,000, and apply the deductible percentage of 2%. The calculation is as follows: 1. Convert the percentage into decimal form: 2% becomes 0.02. 2. Multiply the home's value by the deductible percentage: $500,000 x 0.02 = $10,000. Therefore, Ted’s hurricane deductible is $10,000. This amount represents the portion of the loss that Ted will be responsible for paying out of pocket before the insurance kicks in for claims related to hurricane damage. Understanding how to calculate deductibles based on a percentage of the home's value is crucial for homeowners and policyholders, especially in regions prone to hurricanes, as it can significantly affect financial planning during such events.