Question
Suppose we divide a group of 500 drivers into three groups. In a given year, 325 of those people have only a few door dings
Suppose we divide a group of 500 drivers into three groups. In a given year, 325 of those people have only a few door dings or chipped paint, which costs $300 each. Another 115 of the drivers have medium-sized accidents that cost an average of $1,275 in damages, and 60 of the drivers have large accidents that cost $11,350 in damages.\ \ For the moment, lets imagine that at the beginning of any year, there is no way of identifying the drivers who are low-risk, medium-risk, or high-risk.\ \ What will each of the 500 drivers need to pay in premiums per year in order for the insurance company to collect the amount needed to cover the costs of the accidents that occur? (Round your answer to the nearest whole dollar.)
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