Question

Kurt has 100/300/100 coverage. If one evening you lost control of your car (because the road was icy and you were turning left a little bit too fast), your car hit a parked car. The damage to the parked car was $5,250. How much will insurance pay for the damage, according to your auto insurance policy?

Option 1: $100
Option 2: $250
Option 3: $300
Option 4: $5250

Answer 1

According to the auto insurance policy, the insurance will pay $100 for the damage.

Step-by-step explanation:

The student's auto insurance policy states that they have 100/300/100 coverage. The first number represents the maximum amount the insurance company will pay for bodily injury per person in an accident, the second number is the maximum amount they will pay for bodily injury per accident, and the third number is the maximum amount they will pay for property damage per accident.

In this case, the damage to the parked car is $5,250. Since the third number in the coverage is $100, the insurance will only pay up to $100 for property damage per accident. Therefore, the insurance will pay $100 for the damage, according to the auto insurance policy.

Answer 2

The insurance will pay $5250 for the damage, according to your auto insurance policy. So, Option 4: $5250 is correct.

Step-by-step explanation:

In the given scenario, Kurt's auto insurance policy coverage is expressed as 100/300/100. These three numbers represent the liability coverage limits in thousands of dollars for bodily injury per person, bodily injury per accident, and property damage, respectively. The coverage for property damage is $100,000.

When your car collided with the parked car, causing $5,250 in damage, the insurance will cover the cost up to the property damage limit. In this case, the coverage limit is $100,000, and the incurred damage is $5,250. Therefore, the insurance will pay the full amount of the damage, which is $5,250.

In summary, the correct option is Option 4: $5250. This amount aligns with the property damage coverage limit specified in Kurt's auto insurance policy. It's important to understand the coverage limits and choose an insurance policy that adequately protects against potential risks, ensuring financial security in unforeseen circumstances.