How much will the car dealer's policy pay after the theft of 20 cars?

Prepare for the CII Certificate in Insurance - Insurance, Legal and Regulatory (IF1) Exam with interactive questions. Each question comes with hints and detailed explanations. Equip yourself for success!

In this scenario, the payment made by the car dealer's policy after the theft of 20 cars likely depends on the value of each car covered under the policy. If the policy specifies a certain coverage amount per vehicle, then to find the total payout, one would multiply the number of cars stolen by the individual value covered per car.

Assuming the correct answer provides a total payout of £100,000, this suggests that each car is valued at £5,000. Therefore, the calculation would be:

20 cars x £5,000 per car = £100,000 payout.

This total aligns with the understanding of how insurance policies typically function—each unit (in this case, car) is assigned a specific insured value, and the total claim amount is calculated based on that value. This concept of pro rata payment based on policy limits is a fundamental principle within insurance coverage.

Other amounts provided in the answer choices either do not match the necessary calculations for 20 cars at typical value levels or might stem from misinterpreting coverage limits or individual car values. Thus, £100,000 represents a logical calculation of the payout following the theft of 20 cars under the established conditions.

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