Suppose that you head an insurance company.Your most popular insurance policy has a premium of $600 and a deductible of $1,000.This insurance policy provides your state's minimum coverage of $30,000 for injury or death to one person, $50,000 for injury or death to two or more people, and $10,000 for damage to property, which is called 30/50/10 coverage.

Assume that, on average, 2 of your 100 customers have an accident every year.One of the accidents causes damage to property and the other causes injury or death to one person.Both drivers file for the maximum claims.After paying the claims, will your company still profit from the premiums collected in a year?Explain your answer.

Premiums collected:

600X100= $60,000

Damage to Property:

10,000-1000= $9,000

Injury or death to 1 person:

30000-1000= $29000

Profit:

60,000-9000-29000= $22000

Yes, the company will still profit.Their profit would be $22,000.

Now assume that you are one of the customers purchasing this popular insurance policy with the company.Considering only your premiums, deductible, and claims, what is thebreak-evenperiod after which you could make a$10,000claim for property damage without the insurance company suffering a loss?Explain your answer.

Thecompanies revenueis 600*n

n is the number of premiums or period.

Damage to property claimis $10,000-$1000= $9000

A break even period has zero profits...

600*n-9000=0

n=9000/600

n= 15

15 premiums or 15 years

How would thebreak-evenperiod in this scenario change if you lived in another state?Research another state's minimum coverage requirement and calculate thebreak-evenperiod you calculated above for that state's minimum coverage requirements.Assume that all other variables (premium, deductible, etc.) are the same.Specify the state you researched and its minimum coverage requirements in your answer.