Answer: Fred's total policy limit is $75,000 based on the scenario. This means that if he causes an accident, his insurance company will cover up to a maximum of $50,000 for bodily injury and $25,000 for property damage per accident.
Step-by-step explanation:
To find Fred's total policy limit, we need to consider the maximum coverage amounts provided by his insurance company for bodily injury and property damage.
For bodily injury coverage, the insurance company will pay a maximum of $50,000 per accident.
For property damage coverage, the insurance company will pay a maximum of $25,000 per accident.
To calculate the total policy limit, we add these two amounts:
Total Policy Limit = Bodily Injury Coverage + Property Damage Coverage
Total Policy Limit = $50,000 + $25,000
Total Policy Limit = $75,000
So, Fred's total policy limit is $75,000 based on the scenario. This means that if he causes an accident, his insurance company will cover up to a maximum of $50,000 for bodily injury and $25,000 for property damage per accident.