Question

John has a Personal Auto Policy with liability limits of 10/20/10, basic PIP with no deductible, and Med Pay with a $1,000 limit. He is driving his car during a bad Thunderstorm, loses control on a wet street and runs off the road into a tree. He is Injured and incurs $13,232 in medical bills. How much will John's policy pay and under what coverage?

(A) $11,585.60 ($13,232.80 under UM and $1,000 in Med Pay)

(B) $9,000.00 ($8,000 under UM)

(C) $11,000.00 ($10,000 under PIP and $1,000 in Med Pay)

(D) $12,585.60 ($11,585.60 under UM and $1,000 under Med Pay)

Answer 1

The correct answer is option c. John's policy will pay a total of $11,000: $10,000 under Personal Injury Protection (PIP) and $1,000 under Medical Payments (Med Pay), as Uninsured Motorist (UM) coverage does not apply in this solo accident scenario.

Step-by-step explanation:

The coverage of John's Personal Auto Policy with liability limits of 10/20/10 means that the maximum payment for bodily injury per person is $10,000, with a maximum of $20,000 per accident, and $10,000 for property damage. Basic Personal Injury Protection (PIP) usually covers the policyholder's own medical expenses up to the limit regardless of fault, and Medical Payments (Med Pay) coverage pays for medical and funeral expenses incurred by the policyholder or passengers regardless of fault up to the limit of $1,000.

In the described scenario, John incurred total medical bills of $13,232 due to an accident. PIP would cover up to its limit with no deductible, which means $10,000 would be paid under PIP. The remaining medical expenses would then fall under Med Pay, up to its limit of $1,000. Thus, John's policy will pay a total of $11,000: $10,000 under PIP and $1,000 under Med Pay.

It is important to note that the Uninsured Motorist (UM) coverage is not applicable in this scenario as UM coverage is for incidents involving other uninsured or hit-and-run drivers, and in John's case, the accident was a solo event caused by bad weather conditions.