What amount can Sam expect to receive from his insurer after a $75,000 loss with a $50,000 deductible?

To determine the amount Sam can expect to receive from his insurer after a loss of $75,000 with a $50,000 deductible, it is crucial to understand how a deductible works in an insurance policy. A deductible is the amount that the policyholder is responsible for paying before the insurer begins to cover the remaining costs of a claim.

In this scenario, Sam has incurred a loss of $75,000. Since he has a $50,000 deductible, this amount will be subtracted from the total loss. The calculation is as follows:

1. Start with the total loss: $75,000.

2. Subtract the deductible: $75,000 - $50,000 = $25,000.

Therefore, after accounting for the deductible, Sam can expect to receive $25,000 from his insurer. This amount reflects the insurer’s obligation to indemnify Sam for the loss after he has paid for the deductible portion himself.

The other options do not represent the correct calculations or understanding of how deductibles function in insurance policies. For example, receiving the full amount of $75,000 does not take the deductible into account, and the choice indicating no indemnification overlooks the insurer’s responsibility to cover the remaining loss after the