Problem
Suppose Josiah has an auto insurance policy that has a $600 deductible. Josiah has an accident but luckily he is unharmed. Unfortunately, his car, which he paid $25,000 for a few years ago and still owes $15,750 on is a total loss. The current replacement value of the car is$13,500but the insurance company assigns a value of $12,000 to the car. How much will the insurance company pay out on the policy? Side noter since josiah owes money on the car, the insurance payment will probably be paid to the lender and josiah will still owe in balance remaining after the lender subtracts the payment.