Question

Mary has insured her car under a PAP (personal auto policy) and has purchased the following coverages and limits (in parentheses). Liability ($100,000/$300,000/$75,000) and Uninsured Motorists ($50,000/$100,000/$75,000). One day Mary is a passenger in a friend s car and is involved in an accident with an uninsured motorist. The accident was the uninsured motorist's fault. Mary's car sustains damage of $100,000. Which of the following statements is most correct?

a) Mary's Liability coverage will pay for the damage to her car.
b) Mary's Uninsured Motorists coverage will pay for the damage to her car.
c) Mary's friend's Liability coverage will pay for the damage to her car.
d) Mary's friend will need to pay for the damage to her car.

Answer 1

Mary's Uninsured Motorists coverage will pay for the damage to her car as the accident was caused by an uninsured motorist and she was not the at-fault driver.

Step-by-step explanation:

Mary has insured her car with a Personal Auto Policy (PAP) and is involved in an accident with an uninsured motorist while being a passenger in a friend's car. The correct coverage for the damage to her car in this scenario would be her Uninsured Motorists coverage, which is designed to protect the insured from financial losses when an at-fault driver does not have insurance. This means the correct statement is b) Mary's Uninsured Motorists coverage will pay for the damage to her car. Liability coverage is meant to cover third-party losses when the insured is at fault, which is not the case here as Mary was not driving. Mary's friend's Liability coverage would be relevant if the friend was at fault, which they were not.