Question

In California, the liability for bodily injury or death to one person has a financial responsibility liability limit of:

a) $30,000.
b) $20,000.
c) $15,000.
d) $5,000.

Answer 1

The financial responsibility liability limit for bodily injury or death to one person in California is $15,000. This coverage helps the insurance company gather enough funds from annual premiums (such as $1,860 per driver) to cover accident costs.

Step-by-step explanation:

The financial responsibility liability limit for bodily injury or death to one person in California is $15,000. This is the minimum coverage amount required for drivers under California law. Using a simplified example of automobile insurance, if we have 100 drivers with different risk levels and accident costs, the total damage incurred might come to $186,000. Insurance companies collect premiums from drivers to cover the costs of such damages. For instance, if each driver pays a $1,860 premium annually, the insurance would accumulate the necessary funds to cover the accident costs for that year.