An insurance company has information that 93% of its auto policy holders carry c

Question

An insurance company has information that 93% of its auto policy holders carry collision coverage or uninsured motorist coverage on their policies. Eighty percent of the policy holders carry collision coverage and 60 % have uninsured motorist coverage. What percentage of these policy holders carry both collision and uninsured motorist coverage? What percentage of these policy holders carry neither collision nor uninsured motorist coverage? What percentage of these policy holders carry collision but not uninsured motorist coverage?

Explanation / Answer

a)The probability that the policy holders carry both collision and uninsured motorist coverage is:

P(C and M)

=P(C)+P(M)-P(C or M)

=0.60+0.80-0.93

=0.47

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