Question

Background

Brooke owns a 2010 Honda Civic. She insures the car under a PAP with liability limits of $25/50/25, uninsured motorists coverage of $25,000, medical payments coverage of $5,000 per person, and collision coverage with a $250 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. Please show your calculations and explain the basis for the claim payment.

1.Brooke’s car was hit by a car that ran a stop sign. The driver of the other car fled the scene of the accident. Brooke’s car was not damaged. However, Brooke required extensive medical care as a result of the accident. Her medical expenses from the accident totaled $20,000. Because of her injury, Brooke was unable to work for a week and lost $4,000 in wages.

2.While driving the Civic, Brooke slide off an icy road. Her car was not damaged. Brooke suffers a broken leg, and the passenger riding with her sustained a broken arm and severe laceration on her forehead. Brooke has medical expenses of $3,000 and her passenger has medical expenses of $6,000.

How much will Brooke’s insurer pay? Please show your calculations and explain as appropriate. Please identify the coverage under which each claim would be paid.

Answer 1

Case 1 - Insurance Company is liabile to pay amount maximum to the sum mentioned by it in its agreement . In the given scenario , Brooke required extensive medical care as a result of the accident. Her medical expenses from the accident totaled $20,000 . But Insurance Company only liabile to $ 5,000 that is written on his agrrement.

Addittionally Brooke was unable to work for a week and lost $4,000 in wages.That is another term not covered in Insurance.

Conclusion is after accident , insurance company will pay only $ 5,000 on groud of medical payment coverage and the rest $ 19,000 is loss of Brook.

Case 2 - After reading this case and pre defined term of contract , company is only liable to pay the amount that directly related with brook not with her friend.Brooke suffers a broken leg, and the passenger riding with her sustained a broken arm and severe laceration on her forehead. Brooke has medical expenses of $3,000. Hence Insurance company will liable to pay whole $ 3000.

Rule - Least of actual damage caused or amount defined in Insurance Paper

Conclusion her passenger has to pay their medical expenses of $6,000 by own.