John occasionally borrows the car of his friend,Sophie.Sophie has a PAP with liability limits of 100/300/50.John also has a PAP,and his liability limits 250/500/50.John had an accident while using Sophie's car and was found to be legally liable for $300,000 in bodily injury liability for injuries suffered by one person.How much will be paid by each policy?

Question

Quizplus · Accepted Answer

Sophie's policy has a limit of 100/300/50, which means that her insurance will cover up to $100,000 for bodily injury liability for one person and up to $300,000 for bodily injury liability for all people injured in the accident. Since John was found to be legally liable for $300,000 in bodily injury liability to one person, Sophie's policy will pay the maximum amount of $100,000.

Since John's liability limits are higher than Sophie's, his policy will then kick in. John's policy has a limit of 250/500/50, which means that his insurance will cover up to $250,000 for bodily injury liability for one person and up to $500,000 for bodily injury liability for all people injured in the accident. Since John is liable for $300,000 and Sophie's policy has already paid the maximum amount of $100,000, John's policy will pay the remaining $200,000.

Therefore, Sophie's policy will pay $100,000 and John's policy will pay $200,000.

John Occasionally Borrows the Car of His Friend,Sophie