Chuck has an accident in which he is at fault. His liability limits on his PAP are 100/200/50. Five people besides Chuck are injured in the auto accident. Assuming that the following claims are paid in the order in which they are listed, how much will Chuck's insurer pay, in total, for all the bodily injuries? Joe = $75,000 Mama = $125,000 Fred = $2,500 Granny = $2,500 Bo = $5,000
A) $75,000
B) $200,000
C) $185,000
D) $100,000

Question

Quizplus · Accepted Answer

Chuck's liability limits are 100/200/50. This means that the most his insurance company will pay per person for injuries is $100,000, with a total cap of $200,000 per incident, and $50,000 for property damage. 
Since Mama's claim is the largest at $125,000 and Chuck only has $100,000 coverage per person, Chuck's insurer will pay $100,000 for Mama's claim and exhaust the entire $200,000 limit of the policy. This leaves $75,000 in claims for Joe, Fred, Granny, and Bo. Since Chuck's policy has $100,000 of coverage per person and $200,000 in total coverage, there is still enough to cover the remaining claims. Therefore, the total amount Chuck's insurer will pay is $100,000 + $2,500 + $2,500 + $5,000 + $75,000 = $185,000.

Chuck Has an Accident in Which He Is at Fault