Total Deductible(-) TOTAL Chapter 14: Multirisk Management Contracts II: Auto 6. Barney has a PAP with liability limits of 25/50/15 and collision coverage with a $200 deductible. While pulling his boat and trailer—which are not listed in the policy’s declarations—to the lake, he loses control, sideswipes the car he is passing with his trailer, and then rams a farmer’s tree with his car. The losses are as follows: Barney (medical expenses) $1,300 Barney’s girlfriend (medical expenses) $2,450 Driver of other car Lost income $10,000 Medical expenses $13,500 Mental anguish $20,000 $43,500 Passenger of other car Lost income $5,500 Medical expenses $3,400 $8,900 Barney’s car $4,000 Barney’s boat $800 Barney’s trailer $500 Farmer’s tree $300 Other driver’s Mercedes $29,800 Using the PAP in Appendix B, explain what will and will not be paid by Barney’s insurance contract, and why. Answer: Barney’s limits are: Bodily injury = ___________each person, _______________ each accident
Property damage = $______________ each accident The definition of covered auto is important in this case. The trailer is covered for liability purposes but not for collision purposes because it is not shown in the declarations. The boat is not covered because it is not a "Covered Auto." Since no medical payments limit is indicated, we will assume the basic limit of $500 per person. Barney (medical expenses): Medical payments will pay _________ of his ___________ in medical expenses. Barney bears the remainder. Barney’s girlfriend (medical expenses): Medical payments will pay ___________with the remaining ______________ covered by the bodily injury liability. Driver of other car: Lost income: The lost income of ____________ is covered by Barney’s bodily injury liability. Medical expenses: The lost income of _____________ is covered by Barney’s bodily injury liability. Mental anguish: This is/is not covered by Barney’s PAP because it cannot be accurately measured.
- Fall '19
- actual cash value, Barney, Insurance terms, following coverages