How much indemnification can Sam expect from his insurer after suffering $75,000 in damage with a $50,000 franchise deductible?

When assessing how much indemnification Sam can expect from his insurer, it's essential to take into account both the total damage amount and the deductible specified in the insurance policy.

In this scenario, Sam has incurred $75,000 in damages. However, he has a franchise deductible of $50,000. The deductible is the amount that the insured is responsible for paying out of pocket before the insurance coverage kicks in.

To calculate the indemnification amount, we subtract the deductible from the total damage amount. So, it would be:

Total damage: $75,000
Less deductible: $50,000

This calculation leads to an indemnification of $25,000.

Thus, Sam can expect to receive $25,000 from his insurer as this amount represents what the insurance company will cover after Sam pays his deductible. This understanding reinforces the importance of knowing how deductibles affect the indemnification process and highlights the financial responsibilities taken on by insured individuals during a claim.