22 February 2011
Unit 3 Assignment
Part I: Insurance Coverage Calculations (15pts, roughly 4 points per question)
: Make it very clear what your final answers are, but please show your work.
Lina Green has 20/40/15 automobile liability coverage and is involved in an accident that
is her fault.
Damages suffered by the other parties in the accident are as follows:
First person—bodily injury
Second person—bodily injury
Third person—bodily injury
How much of these claims will the insurance company pay?
The company will pay only $40,000 for the injuries to the claimants and $15,000 for the
damage. The amounts per person injured depends on when their claim is submitted. The
company will pay up to $20,000 a person until the 40 max is reached. For the third
person, they will only be paid $20,000.
How much will not be covered by the insurance company and therefore come out of
Lina's budget? $3000 of property damage (18,000-15,000) and $7,000 in injuries
Justin has auto insurance coverage of 25/75/15 for his new Nissan.
Being a nice guy,
Justin lets his uninsured girlfriend use the car, and she is involved in a major accident that
is her fault.
Following are the damages:
Other driver injury
First passenger in the other car
Second passenger in other car
How much will Justin's auto insurance pay for the above damages?
How much will not be covered by Justin’s auto insurance?