Kevin,who has liability limits of $20,000/$40,000/$20,000 and a $500 collision deductible,is involved in an accident.Due to his negligence he runs into a Rolls Royce.Three people sustained bodily injuries in the Rolls Royce.The driver's injuries were worth $1,000,000,a passenger received injuries worth $12,500,and another passenger received injuries of $7,100.How much will the PAP pay for these bodily injuries?
A)$20,000
B)$40,000
C)$39,600
D)$39,100
E)Some other amount

Question

Quizplus · Accepted Answer

The liability limits for bodily injury are $20,000 per person and $40,000 per accident, meaning that the PAP will only pay up to $20,000 for each injured person but no more than $40,000 for all injured persons.

In this case, the three injured parties in the Rolls Royce had total injuries worth $1,000,000 + $12,500 + $7,100 = $1,019,600.

Since the PAP will only pay up to $40,000 for all injured persons, the maximum amount that will be paid out is $40,000.

Therefore, the PAP will pay $20,000 to the driver with the $1,000,000 worth of injuries, $12,500 to the passenger with $12,500 worth of injuries, and $7,100 to the other passenger with $7,100 worth of injuries, for a total of $39,600.

Kevin,who Has Liability Limits of $20,000/$40,000/$20,000 and a $500 Collision