Download Auto Insurance Coverage and Claims: Case Studies - Prof. Ruth H. Lytton and more Study notes Agricultural engineering in PDF only on Docsity! AAEC 3104: Financial Planning for Professionals Chapter 10: Auto Insurance Mr. Todd Green has an automobile insurance policy with the following limits: Bodily injury liability 100/300 Property damage liability 50 Medical payments $5,000/person Uninsured motorists 20/40 Collision deductible $250 Comprehensive deductible $100 Mr. Green and his daughter were on the way to the mall when they were involved in a 4-car accident that was Mr. Green’s fault. The following damages resulted from the accident: Mr. Green’s injuries $10,000 Driver # l’s injuries $52,000 Driver #2’s injuries $20,000 Driver #3’s injuries $65,000 Passengers injuries in car #1 $2,000 Daughter’s injuries $4,000 Damage to Mr. Green’s car $10,000 Damage to the other automobiles $45,000 Damage to the store the cars hit $15,000 1. How much will Mr. Green’s auto insurance policy pay for the bodily injury liability claims in this accident? a. $100,000 b. $139,000 c. $143,000 d. $153,000 2. How much will Mr. Green’s auto insurance policy pay for the property damage liability claims in this accident? a. $45,000 b. $50,000 c. $55,000 d. $60,000 3. How much will Mr. Green’s auto insurance policy pay for the repair of his own car if it has a book value of $15,000? a. $8,250 b. $9,750 c. $10,000 d. $14,750 1 4. How much will Mr. Green’s auto insurance policy pay for the injuries to him and his daughter? a. $14,000 b. $10,000 c. $9,000 d. $5,000 5. A few months later, Mr. Green and his wife were driving through the countryside when they were hit by Frank, an uninsured driver, who ran a stop sign. Mr. Green sustained injuries of $l2,000 and his wife’s injuries were $25,000. The car cost $5,500 to repair. How much will the Green’s auto policy pay for these damages? a. $37,000 for bodily injury and $5,250 for the car b. $32,000 for bodily injury and $5,250 for the car c. $37,000 for bodily injury and $5,400 for the car d. $27,000 for bodily injury and $5,400 for the car 6. After the insurance company pays for the damages Frank caused Mr. Green and his wife, what will the insurance company probably do? a. Issue Frank an auto insurance policy b. Assign a claims adjuster to the case c. Change Mr. Green’s policy to a named-perils policy d. Subrogate the damages -- sue Frank’s insurance company for the damages paid to their customer, the Greens 7. Lina has 20/40/15 automobile liability coverage and is involved in an accident that is her fault. Damages suffered by the other parties in the accident are as follows: 1st person – bodily injury $21,000 2nd person – bodily injury 15,000 3rd person – bodily injury 10,000 Property damage 18,000 How much of these claims will not be covered by the insurance company and therefore, come out of Lina’s budget? a. $1000 b. $3000 c. $5000 d. $9000 NOTE: BIL claims exceed maximum coverage of $40,000. WHO won’t get paid – no easy answer, but the answer most likely is the person who files the paperwork last! 2
