Question

4. A driver causes an accident in which the other driver's car sustains $12,000 worth of

damage and the other driver suffers bodily injuries that are valued at $8,000. The
driver's liability insurance policy has a limit of $15,000 per person and $30,000 per
accident. How much will the insurance company pay for the bodily injuries and
property damage?

Answer 1

The insurance company will pay the full $8,000 for bodily injuries and $12,000 for property damage, totaling $20,000, as both are within the policy limits.

Step-by-step explanation:

The student is asking about how the liability insurance policy would cover costs related to an accident caused by the insured driver.

The driver's policy has a limit of $15,000 per person for bodily injury and $30,000 per accident. With $12,000 in property damage and $8,000 in bodily injuries, the total amount needed to cover the damages and injuries is $20,000.

The insurance will pay the full $8,000 for bodily injuries as it falls within the per person limit.

However, for property damage, as it doesn't exceed the per accident limit of $30,000, the insurance will pay the full $12,000 as well.

In total, the insurance company will pay out $20,000 to cover both the bodily injuries and property damage caused by the accident.