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Policyholder B has a business auto policy with limits of 100/300/50. In an accident for which B was liable, there were BI claims in the amounts of $80,000; $100,000; and $125,000; and PD claims of $20,000 and $35,000. How much will his policy pay?

A $280,000 BI and $50,000 PD
B $305,000 BI and $50,000 PD
C $305,000 BI and $55,000 PD
D $300,000 BI and $50,000 PD

User Daylerees
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1 Answer

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Final answer:

Policyholder B's business auto policy will provide $300,000 for bodily injury claims and $50,000 for property damage claims, as per the limits of 100/300/50, even though the total claims exceed these amounts.

Step-by-step explanation:

Policyholder B's business auto policy clearly states limits of 100/300/50. This means the policy will cover up to $100,000 per person for bodily injury (BI), $300,000 per accident for bodily injury, and $50,000 per accident for property damage (PD). Based on the limits of the policy, which are 100/300/50, we can see that the policyholder has coverage for bodily injury (BI) claims up to $100,000 per person, $300,000 per accident, and property damage (PD) claims up to $50,000. In the accident for which Policyholder B was liable, there were BI claims of $80,000, $100,000, and $125,000, and PD claims of $20,000 and $35,000. In this case, the policy will pay up to the policy limits, which are $100,000 per person $300,000 per accident for BI claims, and $50,000 for PD claims.

In the case presented, the total BI claims amount to $305,000 ($80,000; $100,000; $125,000), but the policy limit per accident is $300,000, thereby the insurer will pay the maximum of $300,000 towards BI claims. As for PD, the claims are $20,000 and $35,000, totaling $55,000, but again, due to the policy limit of $50,000 per accident, the insurer will pay a maximum of $50,000 toward PD claims. Therefore, the direct answer in two lines to how much the policy will pay is a total of $350,000, which is broken down into $300,000 for BI and $50,000 for PD.

User Ant
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