Question

Marika Katz bought a new Blazer and insured it with only compulsory insurance 10/20/5. Driving up to her summer home one evening, Marika hit a parked car and injured the couple inside. Marika’s car had damage of $9,800, and the car she struck had damage of $8,100. After a lengthy court suit, the couple struck were awarded personal injury judgments of $15,700 and $6,700, respectively.

a. What will the insurance company pay for this accident?

Amount paid            $

b. What is Marika’s responsibility?

Amount paid            $

Answer 1

The term 10/20/5 is iexplained below:

$10,000 per person - Bodily Injury, loss wages, pain and suffering, medical expenses, and/or funeral expenses to the other party in the event you were at faut for an accident

$20,000 per occurence - Same as above; but, a maximum of 20k for the accident in it's entirety.

$5,000 property damage - damages will be covered up to this limit towards a tree, fence, house, vehicle, light pole, etc. that you be legally liable for.

Computation of amount insurance company will pay:

Insurance company pays

Bodily $16,700 .I.e. ($10,000 + $6,700)

Property $ 5,000

Total $ 21,700

  

(B)

Computation of Marika's responsibility

Marika pays

Bodily $ 5,700 i.e ( $15,700 - $10,000)

Property $ 9,800 no collision

Property damage not covered by compulsory ($8,100 - $5,000) $3,100

Total $18,600

Marika's responsibility to pay is $18,600