Marc Rose has a PAP with coverage of $15,000/$30,000 for bodily injury liability
ID: 2796933 • Letter: M
Question
Marc Rose has a PAP with coverage of $15,000/$30,000 for bodily injury liability, $15,000 for property damage liability, $10,000 for medical payments, and a $500 deductible for collision insurance. How much will his insurance cover in each of the following situations? Will he have any out-of-pocket costs? Round your answer to the whole dollar, if necessary. Leave no cells blank, be sure to enter "0" wherever required.
1. Marc loses control and skids on ice, running into a parked car and causing $4,715 damage to the unoccupied vehicle and $2,405 damage to his own car.
Total paid by the insurance company $ 1,850
Marc's out-of-pocket costs $ 1,850
2. Marc runs a stop sign and causes a serious auto accident, badly injuring two people. The injured parties win lawsuits against him for $31,000 each.
Total paid by the insurance company $
Marc's out-of-pocket costs (for both victims) $
3. Marc's 18-year old son borrows his car. He backs into a telephone pole and causes $425 damage to the car.
Total paid by the insurance company $ 0
Marc's out-of-pocket costs
Explanation / Answer
A
Total property damage done = $4715 + $2405 = $7120
This will be covered under property damage liability insurance subject to a collision deductible of $500
Insurance will pay = $7120 - $500 = $6620
Out of pocket cost = $500
B
Coverage of $15,000/$30,000 in bodily injury liability means that insurance will pay $15000 per person and a total of $30000 per accident
In this case, the claims are of $31000 each which is a total of $62000
The accident pay only $30000
Out of pocket costs = $32000
C
A collision accident will have a deductible of $500
Here the amount is less than $500, so the insurance company pays nothing
Out of pocket costs = $425