 Personal Finance Practice Problem using OneNote. Insurance Payment Calculation Property Damage. Prepare to get financially fit by practicing personal finance. You're not required to, but if you have access to OneNote, would like to follow along with the icon on the left hand side, Practice Problems tab and the 8070 Insurance Payment Calculation Property Damage tab. Also take a look at the Immersive Reader Tool. The practice problems are often in the text area too with the same name, same number, but with transcripts, transcripts that can be translated into multiple languages either listened to or read in them. Information on the left hand side says that we have the auto or car insurance. We have the 80 slash 160 slash 90. What does that mean? Remember that when we're talking about car insurance from an insurance perspective, we're talking about different kinds of insurance that are under the umbrella of or related to the car of the automobile. Thing on the left hand side says the first number represents bodily injury per person. The second number represents bodily injury per occurrence and the last number represents property damage per occurrence. So if we were to break that out in a table, which is useful to do if you're going to try to make calculations in this, in like an Excel for example, which we do do in Excel. It's a good practice to work these kind of problems in Excel. So we've got the auto insurance. We've got the 80 representing the maximum per person injured, representing 80,000. We've got the maximum per accident for injury was 160, representing 160,000. And then we have the max property damage. Note that it doesn't have the property damage like per person, but rather just the cap at the 90 up top, which represents the 90,000. So the property damage could be like we hit a parked car or we hit like a fence or we hit like some other, we hit a building or something like that causing property damage. Okay, so if we were going to break this out, we're then going to imagine here that we have an at fault accident that we were at fault at we're imagining that caused property damage. So it caused property damage. So we're not really looking at the first two numbers, which we looked at in a prior problem, the 80 and the 160, but we're considering that 90. It caused property damage to two people, two different, you know, owners of property. So we've got the 30,000 and the 70,000. We can imagine we hit a car, a parked car and then a fence or something like that for two different people that have claims about an accident that we caused and caused then the property damage. So if we think about that, we could say, okay, and there's multiple ways you could put together a table. You could say, okay, well, we got a person. A has a claim for property damage of the 30,000. Person B has the claim of the 70,000. We don't have like we had with the injury. This first component, which is the property damage per person, but rather we just have to cap at that 90, which represents the 90,000. So if I add that together, we're at the 100,000. The insurance is going to cap it at 90,000. So therefore the insurance may cover simply the smaller of the two or the 90,000 here amount paid from pocket. Then the amount that we may be liable for have to pay over and above than what the insurance covers would be then the 10,000. Now you might think, well, what if we don't have like the ability to pay the 10,000 or whatever? Or for example, if they're just going to the insurance company is going to pay out the 90,000, how are they going to do that with these two people that have these two different claims? Who's going to get what from the insurance company? Because possibly the person who was at fault in the accident doesn't have any money or something like that. How would they pay it out? And this would just be a common kind of technique. You might say, okay, well, if the first person had 70, had 30 versus 70, the total is 100. So if you were just to logically think about that, you'd say, okay, well, let's do a ratio. Let's say 30,000 divided by 100,000 is 30% or 0.3. And then the 70,000, if I take the 70,000 divided by 100,000, that's going to be 0.7 or 70%. And that equals to 100%. So if I'm paying out the insurance companies paying out 90 and 90, if they're paying out just the 90,000, then we can break that out on a 30, 70 split. You would say maybe the first person gets the 90,000 times the 0.3, which would be the 27,000. Maybe the second person gets then the 90,000 times 0.7. That's going to be the 63,000. Adding that to the 27,000 is going to be the total 90,000. So that's a common technique that Principal will apply in many different types of scenarios when you come into an issue such as that. So we do work this problem in Excel. These are great problems to work in Excel to build these kind of little tables and try to think about how you might put this together in a table format.