Question

If an insured has the Basic $10,000 in PIP coverage and no deductible, and after an automobile accident incurs $2,300 in medical expenses, $1,300 in lost wages, and $300 in expense for general housekeeping services, how much would you pay in response to a claim filed for PIP?

(A) $3,600
(B) $2,860
(C) $2,920
(D) $3,900

Answer 1

The insured's PIP claim for medical expenses, lost wages, and housekeeping services amounts to $3,900, which is fully covered by the Basic $10,000 PIP coverage with no deductible, leading to a full payout of the claim.

Step-by-step explanation:

To calculate the total amount to be paid in response to a claim filed for Personal Injury Protection (PIP), we simply add up the insured's medical expenses, lost wages, and other covered expenses, as long as they do not exceed the insured's PIP coverage limits.

In this case, the insured incurred $2,300 in medical expenses, $1,300 in lost wages, and $300 in expenses for general housekeeping services.

Adding these amounts together:

• Medical Expenses: $2,300
• Lost Wages: $1,300
• Housekeeping Services: $300

Total Claim Amount = $2,300 + $1,300 + $300 = $3,900

Since the insured has a Basic $10,000 in PIP coverage and no deductible, the full claim amount of $3,900 would be paid out, which matches option (D).