practice question for PAP
by Christine Smith - The practice question in the 24th edition State manual reads:
22. Ralph has a PAP with Liability of 10/20/10 and Basic PIP with a $1000 ded. He is running one day and is struck as a pedestrian by a car. A week later, he dies. Medical bills are $3000, and lost wages are $1000. How much, if any, will PIP pay in this claim?
A $2000, B $2,200, C $7,000, D $7,200.
My answer :C. Reason: medical 3000 x.80= $2400, Lost wages 1000 x .60= $600, death= $5000 which totals 8000- 1000 deductible= 7,000
The study manual states the correct answer is however, D= $7,200.
What am I missing?
Re: practice question for PAP
by Kaylee Colvard - Take the $1000 deductible out of the medical bills before you take the 80%.
$3000 - $1000 deductible = $2000 x 80%
Keep the same calculations you have for everything else. Answers $7200
Re: practice question for PAP
by Christine Smith - So the deductible is only applicable to the medical pymts? Deductible is Not applicable to death, loss wages or replacement services?
Re: practice question for PAP
by Kaylee Colvard - The deductible is a one time "charge" off of the pup coverages. In the crash course i took, they said multiple times the deductible does not come off at the end.....take it off the top. Hope that helps :)
Re: practice question for PAP
by Jan Bradburn- - Christine,
The deductible is taken from the medical expenses only. If there were no medical injuries, the insured would not need the wage loss, replacement services or death benefit.
Jan
The deductible is taken from the medical expenses only. If there were no medical injuries, the insured would not need the wage loss, replacement services or death benefit.
Jan
Re: practice question for PAP
by Gerzell Sanders Wiggins - You have to take the deduction off of the medical first:
3000-1000=2000
2000x.80=1600