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Jim's son, Hayden, received his first car at age 16, a 1997 Ford Taurus. Jim's Personal Auto Policy has full coverage with Liability limits of $300,000, Med Pay of $5,000, Basic PIP, Additional PIP of $25,000, Extended PIP, stacked UM, Collision with a $500 deductible and Comprehensive with no deductible. Hayden's car, valued at $3,000.00, is added to the policy and insured for the policy's existing Liability, Med Pay, PIP and UM limits only. Hayden [permanently] installed a CD player in the dash, replacing the manufacturer's radio unit at a cost of $250.00. Only a month later, the car was stolen from the school parking lot. Hayden insists that a claim be filed under the family's insurance policy so he can get another car and buy a new CD player for it. What would you tell him the policy will pay?

(A) $3,000.00; The CD player is not covered as it was not the original manufacturer unit.
(B) $ - 0 - ; There is no Comprehensive coverage.
(C) $ 250.00; There is no Comprehensive coverage, so theft is not covered.
(D) $3,250.00; There is no deductible for theft, so the entire amount is paid.

1 Answer

6 votes

Final answer:

The policy will not pay anything for the stolen car or the replacement CD player.

Step-by-step explanation:

The policy will pay (B) $ - 0 -; there is no Comprehensive coverage. Since Hayden's car was stolen and there is no Comprehensive coverage in Jim's Personal Auto Policy, the policy will not pay anything for the stolen car. Additionally, the CD player is not covered because it was not the original manufacturer unit. Therefore, Hayden will not receive any insurance compensation for the stolen car or the CD player.

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