Answer:
E. $5,000
Explanation:
In the given case, as one time deductible fee = $300
Thus, this will be deducted from the annual bill of $55,000
Effective bill amount = $55,000 - $300 = $54,700
Non-covered amount of bill = $54,700 [tex]\times[/tex] 10% = $5,470
Now, total uncovered amount = $5,470 + $300 = $5,770
We see that this amount exceeds the stop loss provision amounting $5,000. Thus, the amount to be paid by Carter shall be: $5,000 only.
The remaining amount shall be paid by the insurance company.
