Question

Rusty Reft, who lives in Territory 5, carries 10/20/5 compulsory liability insurance along with optional collision that has a $300 deductible. Rusty was at fault in an accident that caused $2,600 damage to the other auto and $1,900 damage to his own. Also, the courts awarded $14,000 and $8,000, respectively, to the two passengers in the other car for personal injuries.

a. How much will the insurance company pay?
b. What is Rusty’s share of the responsibility?

Answer 1

Insurance is a key aspect for any individual or a business or any activity, to safeguard against any unprecedented risks / accidents, involving serious damage or loss; This concept of insurance has expanded its wings from life, health etc to accident, Motor vehicles, Crops, Business Loss, Hazards, etc;

In automobile insurance policies, term “ 10/20/5” denotes the amount of coverage the policy provides for liability translates into thousands of dollars, that is $10,000/$20,000/$5,000.

- First number refers to the maximum amount the policy will pay for bodily injury per injured individual per accident : $ 10000

- Second number refers to the limit of liability amounts for all injuries per accident : $ 20000

- Third number refers to the maximum amount of liability coverage for property damage in one accident : $ 5000

Also, in this given case, since the Optional collision cover is chosen, the claimant shall be able to claim for the vehicle damage or total loss, if the claimant is at fault in an accident.

	Claims	Max Allowed	Admissible Claim	Non- Admissible Claim	Addl	Payment by Rusty Reft
Optional Collision Cover Deduction					300	300
Damage to Other vehicle	2,600
Damage to self vehicle	1,900
Total Property Damage	4,500	5,000	4,500	-		-
Damages to Passenger 1	14,000	10,000	10,000	4,000		4,000
Damages to Passenger 2	8,000	10,000	8,000	-
Total Claims on Injuries	22,000	20,000	18,000	4,000		4,000
Total	22,500			4,300

The Insurance company shall pay $22500 and Rusty's shall share the responsibility of paying 4300 (including collission coverage);