John has an auto which is covered for collision losses subject to a $2

John has an auto which is covered for collision losses subject to a $250 deductible. Kate’s auto also has collision coverage but her deductible is $500.

Which of the following statements describes how a $2,000 collision loss will be paid if it occurs when John borrows Kate’s car because his car is in the shop for repairs?
A) John’s policy will pay $1,500, and Kate’s policy will pay nothing.
B) John’s policy will pay $1,750, and Kate’s policy will pay nothing.
C) Kate’s policy will pay $1,750, and John’s policy will pay nothing.
D) Kate’s policy will pay $1,500, and John’s policy will pay $250.

ANSWER

Answer: D