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Principles of Risk Management and Insurance (13th Edition), Chapter 20, Problem 1AQ, there is no solution, can you make one?

Alan has a PAP with the following coverages:

Liability coverages: $100,000/$300,000/$50,000

Medical payments coverage: $5,000 each person

Uninsured motorists coverage: $25,000 each person

Collision loss: $250 deductible

Other-than-collision loss: $100 deductible

With respect to each of the following situations, indicate whether the loss is covered and the amount payable, if any, under the policy. Assume that each situation is a separate event.

A. Alan's son, age 16, is driving a family car, runs a red light, and kills a pedestrian. The family of the deceased pedestrian sues and damages are awarded in the amount of $500,000.

B. Alan works for a construction company. While driving a large cement truck, he negligently injures another motorist. The injured motorist sues Alan for $25,000.

C. Alan borrows a friend's car to go to the supermarket. He fails to stop at a ed light and negligently smashes into another motorist. The other driver's car, valued at $15,000, is totally destroyed. In addition, repairs to the friend's car are $5,000.

D. Alan's daughter, Heather, attends college in another state and drives a family auto. Heather lets her boyfriend drive the car, and he negligently injures another motorist. The boyfriend is sued for $50,000.

E. Alan's wife is driving a family car in a snowstorm. She loses control of the car on an icy street and smashes into the foundation of a house. The property damage to the house is $30,000. The damage to the family car is $8,000. Alan's wife has medical expenses of $5,000.

F.  Alan is walking across a street and is struck by a motorist who fails to stop. He has bodily injuries in the amount of $15,000.

G. Alan's car is being repaired for faulty brakes. While road testing the car, a mechanic injures another motorist and is sued for $50,000.

H. Alan's car hits a cow crossing a highway. The cost of repairing the car is $2,500.

I. A thief breaks a car window and steals a camera and golf clubs locked in the car. It will cost $400 to replace the damaged window. The stolen property is valued at $500

J. Alan's wife goes shopping at the supermarket. When she returns, she finds that the left rear fender has been damaged by another driver who did not leave a name. The cost of repairing the car is $2,000.

HR Management, Management Studies

  • Category:- HR Management
  • Reference No.:- M92552002

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