Please explain. Will fan and medal.
Acasa Insurance Company offers two plans for home insurance. Plan A has a $750 yearly premium with a $3,000 deductible. Plan B has a $1,200 yearly premium with a $1,000 deductible. Last year, 20% of all policyholders made damage claims. The average claim amount was $6,500.

The expected value per claim for every customer who chooses plan B is $. The expected value per claim for every customer who chooses plan A is $.

Question

Please explain. Will fan and medal. 
Acasa Insurance Company offers two plans for home insurance. Plan A has a $750 yearly premium with a $3,000 deductible. Plan B has a $1,200 yearly premium with a $1,000 deductible. Last year, 20% of all policyholders made damage claims. The average claim amount was $6,500.

The expected value per claim for every customer who chooses plan B is $. The expected value per claim for every customer who chooses plan A is $.

anonymous · Answer

Plan A breakdown - There is a 20% chance they pay $3000 deductible for a $6500 claim. This is on top of $750 premium which they definitely have to pay (100%). So, Value should be 0.2x(6500-3000) - 750
Plan B Breakdown: Similar explanation. Value =  0.2(6500-1000) - 1200.

Hope this helps

anonymous · Answer

@livingmaybe so -50 for A
and -100 for B