John has an auto which is covered for collision losses subject to a $250 deductible.Kate's auto also has collision coverage but her deductible is $500.Which of the following statements describes how a $2,000 collision loss will be paid if it occurs when John borrows Kate's car because his car is in the shop for repairs?

Question

Quizplus · Accepted Answer

Since John was driving Kate's car at the time of the accident, Kate's policy will be the primary policy and will pay up to its limit of coverage ($2,000 - $500 = $1,500). John's policy will then cover the remainder up to its limit of coverage ($1,500 - $250 = $1,250). Therefore, Kate's policy will pay $1,500 and John's policy will pay $250.

John Has an Auto Which Is Covered for Collision Losses