Question

Ashley Diamond of Estes Park, Colorado, drives an eight-year-old Toyota valued at $9,900. She has a $79,000 personal automobile policy with $10,000 per-person medical payments coverage and both collision ($200 deductible) and comprehensive coverage. David Smith of Loveland, Colorado, drives a four-year-old Chevrolet Malibu valued at $9,300. He has a 25/50/15 family automobile policy with $22,000 in medical payments coverage and both collision ($100 deductible) and comprehensive insurance. Late one evening, while he was driving back from Rocky Mountain National Park, David's car crossed the centerline of the road, striking Ashley's car and forcing it into a ditch. David's car also left the road and did extensive damage to the front of a roadside store. The following table indicates the damages and their dollar amounts:

Item		Amount
Bodily injuries suffered by Ashley		$  6,600
Bodily injuries suffered by Fran, a passenger in Ashley's car		28,666
Ashley's car		9,900
Bodily injuries suffered by David		2,900
Bodily injuries suffered by Cecilia, a passenger in David's car		12,770
David's car		9,300
Damage to the roadside store		14,326

Use the information to answer these questions. Round your answers to the nearest dollar.

How much will Ashley's policy pay Ashley?

$  

How much will Ashley's policy pay Fran?

$  

Will subrogation rights come into play? In what way?

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

How much will David's bodily injury liability protection pay?

$  

How much will David's property damage liability protection pay?

$  

To whom will David's property damage liability protection pay?

-Select-To Ashley             To CeciliaTo FranTo Ashley and to the owner of the roadside storeTo Cecilia and to the owner of the roadside storeTo Fran and to the owner of the roadside storeItem 6

How much will David's medical protection pay?

$  

To whom will David's medical protection pay?

-Select-To Ashley             To CeciliaTo FranTo Ashley and DavidTo Cecilia and DavidTo Fran and DavidItem 8

How much reimbursement will David receive for his car?

$  

How much will David be required to pay out of his own pocket?

$  

Answer 1

Ashley's insurance:

Total coverage $79,000 with $ 10,00 per person. $200 deductible.

Thus, insurance will pay Ashley = $9,900 for car plus $6,600 for her expenses less $200 charges

= $ 16,300

Insurance will pay Fred = $10,000

Total is within $79,000 limit.

David's insurance policy :

25/50/15 which implles $25,000 liability coverage per individual per accident, $50,000 liability coverage per accident for all individuals, and $15,000 property damage coverage per accident

$22,000 medical payments less $100 deductible

Thus, Insurance will pay David = $9,300 for car plus $ 2,900 less $100 charges = $12,100 (within limit of $25,000)

Insurance will pay Cecilia = lower of ($22,000 less $2,900) or $12,770, i.e. $12,770

Insurance will pay towards store damage = lower of ($15,000 less $9,300) or $14,326 = $5,700

David will pay store out of his own pocket = $14,326 - $5700 = $8,626