Question

Question 18

Solve the problem.

Four people are injured in an auto accident, and each receives $20,000 in damages from the court. The driver has liability limits of 100/300. Find the amount that the insurance company must pay and the amount that the insured must pay.

		$300,000, $20,000
		$80,000, $0
		$0, $60,000
		$100,000, $20,000

Answer 1

B.$80,000, $0.

liability limits are 100/300 that means,

There is a coverge of $100,000 bodliy injury liability per person.

And $300,000 total bodlily injury liability insurance per accident.

here,

the court awarded only $20,000 damage per person (which is below $100,000 per person limit)

The total liability is ($20,000 * 4 persons) =>$80,000.(which is below $300,000 per accident limit).

So the full liability of $80,000 will be met by insurance company and the insured need not pay anything.