Case 8: When Alex was cutting down a tree, a person walking by was hit by...

Case 8: When Alex was cutting down a tree, a person walking by was hit by the falling tree. The injured person sued Alex for $300,000. Alex’s homeowners’ insurance had $100,000 liability coverage. He also purchased a $1 million Personal Umbrella Liability insurance.

How much will be paid by Alex’s homeowners’ insurance and how much will be paid by his Umbrella insurance?

Solutions

Expert Solution

$100000 will be paid by the Homeowners insurance since the damage is caused due to accident by part of the property. The personal umbrella liability insurance provides additional security for risk of loss due to injury caused to another in an accident. Hence the balance of $200000 will be paid by the Umbrella Insurance

jeff jeffy answered 1 year ago

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