Question

Noris borrows Arnold's truck to pick up some lumber from the hardware store. On the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50/100/50 and Arnold's policy has liability limits of 25/50/10. How much will the primary policy pay for the injuries?

A. $60,000
B. $30,000
C. $50,000
D. $25,000

Answer 1

The primary policy will pay $30,000 for the injuries.

Step-by-step explanation:

The primary policy will pay $30,000 for the injuries.

Under Norris's policy, the liability limits are 50/100/50. This means that the policy will pay up to $50,000 for one person injured in an accident, up to $100,000 for all injuries in an accident, and up to $50,000 for property damage.

Since there are three people injured in the accident, Norris's policy will pay the maximum limit of $50,000 per person, which amounts to $150,000 in total. However, Arnold's policy will only pay up to $25,000 per person injured (as per the liability limits of 25/50/10). Therefore, the primary policy will pay a total of $75,000 for the injuries, which is $25,000 for each person injured.