Question

An insured has an automobile policy with the limits of 100/300/50 and a deductible of $1,000. He is involved in an auto accident and crashes into another driver's auto. The other driver is awarded $125,000 for his injuries and $25,000 for the damage to his car. The insured's vehicle has damage in the amount of $1,200. What is the total payment made under the insured's policy?

a) $100,000

b) $125,000

c) $126,200

d) $26,200

Answer 1

The total payment made under the insured's policy is $126,200.

Step-by-step explanation:

An insured has an automobile policy with the limits of 100/300/50 and a deductible of $1,000. In this policy, the first number represents the maximum amount of coverage for bodily injury per person, the second number represents the maximum coverage for bodily injury per accident, and the third number represents the maximum coverage for property damage per accident.

In this case, the insured is at fault and the other driver is awarded $125,000 for his injuries and $25,000 for the damage to his car. Since the insured's policy has a bodily injury coverage limit of $100,000 per person and $300,000 per accident, it will fully cover the $125,000 awarded to the other driver for his injuries.

However, the insured's vehicle has damage in the amount of $1,200, which is less than the policy's property damage coverage limit of $50,000 per accident. Therefore, the insured's policy will cover the full amount of the damage to his own vehicle. The total payment made under the insured's policy will be $125,000 for the other driver's injuries and $1,200 for the damage to his own vehicle, totaling $126,200.