Question

Harry has a Personal Auto Policy (PAP) with liability limits of 100/$300/$50 and medical payments limits of $5,000 insuring his SUV. Harry also has other than collision and collision coverages with deductibles of $250 and $500, respectively. The local taxicab drivers are on strike and Harry decides to capitalize on the situation by transporting persons in his SUV for a fee. While transporting a businessman, Harry loses control of his SUV and hits a parked car. The damages are as follows:

Harry's medical costs - $2,000The businessman's medical costs - $1,000Damage to the parked car - $14,000Damage to Harry's car - $12,000How much, if any, will Harry's PAP insurer pay for damages under Part A—Liability Coverage?A. $0B. $14,000C. $17,000D. $29,000

Answer 1

A) $0

Step-by-step explanation:

The personal automobile policy (PAP) is an automobile insurance contract which most people purchase in order to protect their automobile from costs that may arise due to auto accidents.

Under the Part A—Liability Coverage, there are exclusions whereby the insurer won't pay for any damage, and one of the exclusions states that "for that “insured’s” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance, no liability coverage would be provided."

In this case, since Harry used his SUV to transport people for a fee, Harry's PAP insurer won't pay for damages under Part A—Liability Coverage because he used his SUV for livery conveyance.

Some quotes were stated from "Types of Automobile Policies and the Personal Automobile Policy"