Answer: $1166.91
Step-by-step explanation:
The following can be deduced from the question:
Average cost of an accident = $14,886.05
Probability of a driver getting into an accident = 7.1% = 7.1/100 = 0.071.
Overhead cost for insurance = $110
Therefore, the expected cost of an accident will be calculated as:
= Average cost of an accident × Probability of a driver getting into an accident
= $14,886.05 × 0.071
= $1056.91
Therefore, the driver's insurance premium will then be:
= $1056.91 + $110
= $1166.91
