Final answer:
Supplementary payments under Part A of the Personal Auto Policy can pay for bail bonds up to $250, but do not cover doctor bills, loss of earnings, or judgements exceeding liability limits.
Step-by-step explanation:
Supplementary payments under Part A of the Personal Auto Policy provide various additional coverages beyond the policy limits. These can include the cost of bail bonds required because of an accident, up to a certain limit, typically $250. Therefore, the correct answer is B) $250 for bail bonds. They do not cover medical expenses, loss of earnings due to disability, or judgements exceeding the policy limits for liability.
To understand how auto insurance operates in general, consider an example where a group of 100 drivers all pay premiums to cover the collective risk of accidents. If damages amount to $186,000 from various incidents among these drivers, and each driver pays a $1,860 premium, the insurer collects enough to cover these costs. This risk-sharing mechanism helps ensure that financial assistance is available when an insured party needs it the most.