George has a personal auto policy with a per-person liability limit of $300,000.He also has a personal umbrella policy with a limit of $2,000,000 and a self-insured retention of $1,000.How much will be paid by each policy if a person wins a judgment of $500,000 against George as a result of bodily injury arising from the auto accident?

Question

Quizplus · Accepted Answer

The per-person liability limit of George's auto policy is $300,000, therefore, the auto policy will pay $300,000. The total judgment is $500,000, so the umbrella policy will pay the difference between the judgment amount and the auto policy limit, which is $200,000. However, since the self-insured retention of the umbrella policy is $1,000, it will not be applicable in this case. Therefore, the auto policy will pay $300,000, and the umbrella policy will pay $200,000.

George Has a Personal Auto Policy with a Per-Person Liability