Question

Mary has an Auto policy with Basic PIP coverage, a deductible of $500 and Property Damage limits of $10,000. She hits a bicyclist who is riding on the right side of the road and veers into the lane in front of her. She tries to avoid him, but there is traffic coming from the opposite direction and she hits him, causing a total loss of the bicycle valued at $355.00 and injuries to the bicyclist resulting in $3,400 in medical expenses and $757.50 in lost wages. You receive a phone call from the claimant asking if you will pay for his bicycle. He also says that his personal insurance paid for his medical except for $885 in deductible and co-pays and asks if you will pay his out of pocket medical bills and his lost wages. Disregarding arguments about liability, how much could you pay for property damage under Mary's policy?

(A) $757.50
(B) $ -0-
(C) $355.00
(D) $257.50

Answer 1

Under Mary's policy, the insurance company could pay up to $355.00 for property damage.

Step-by-step explanation:

Automobile insurance, often referred to as car insurance, is a type of insurance coverage that provides financial protection in the event of a car accident, theft, or other incidents involving a motor vehicle. Auto insurance is designed to help cover the costs associated with vehicle damage, injuries to drivers and passengers, and liability for damages to other people or property.

Under Mary's policy, the property damage limits are $10,000. Since the total loss of the bicycle is valued at $355.00, the insurance company could pay up to that amount for property damage. Therefore, the correct answer is (C) $355.00.