Solve the problem.
-A pipe fell off a moving truck into the path of the car behind it. The driver and passenger were each awarded $37,000 by the court and damage to the car was $17,000. The truck driver had 25/50 liability insurance limits and $10,000 property damage limits. Find the amount that the insurance company must pay and the amount that the insured must pay.

Question

Quizplus · Accepted Answer

The liability insurance limits of 25/50 means that the maximum amount per person injured is $25,000 and the maximum amount per accident is $50,000. Since the driver and passenger were each awarded $37,000, the insurance company must pay a total of $74,000 for bodily injury.

The property damage limit of $10,000 means that the insurance company will only pay up to $10,000 for damage to the car. Since the damage was $17,000, the insured must pay the remaining $7,000.

Therefore, the insurance company must pay $74,000 and the insured must pay $7,000, for a total of $81,000. None of the given options match $81,000, but the closest one is option D, which has the correct breakdown of $60,000 to be paid by the insurance company and $31,000 to be paid by the insured.

Solve the Problem. -A Pipe Fell Off a Moving Truck into the Path