Question

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, indi- cate whether the loss is covered and the amount pay- able, 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 borrows a friend’s car to go to the supermar- ket. He fails to stop at a red light and negligently smashes into another motorist. The other driver’s car, valued at $15,000, is totally destroyed. In addi- tion, repairs to the friend’s car are $5,000.
c. Alan’sdaughter,Heather,attendscollegeinanother state and drives a family auto. Heather lets her boy- friend drive the car, and he negligently injures another motorist. The boyfriend is sued for $50,000.
d. 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 prop- erty 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.
e. 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.

f. 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.

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

h. Athiefbreaksacarwindowandstealsacameraand golf clubs locked in the car. It will cost $400 to replace the damaged window. The stolen property is valued at $500.

i. Alan’s wife goes shopping at a 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.

j. Alan works for a construction company. While driv- ing a large cement truck, he negligently injures another motorist. The injured motorist sues Alan for $25,000.

k. Alan’s son drives a family car on a date. He gets drunk, so his girlfriend drives him home. The girl- friend negligently injures another motorist, who has bodily injuries in the amount of $200,000.

l. Compact discs (CDs) valued at $500 are stolen from Alan’s car. The car was locked when the theft occurred. m. While driving a rented golf cart, Alan accidentally injures another golfer with the cart.

Answer 1

(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.

◦Alan's son is insured under the policy. $100,000 would be the liability available

.•(b)Alan borrows a friend's car to go to the store. He fails to stop at a red light and negligently smashed 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.

◦Since this is an unowned auto Alan's insurance will pay excess. It would pay all of the insurance if his friend did not have insurance. The other driver's car would come out of liability. For the friend's car it is a collision loss so they would pay the $5,000 – the collision deductible of $250

.•(c)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.

◦If he had permission then he is included under policy. Would be payed under the liability section. For this injury there was $100,000.

•(d)Alan's wife is driving a family car in a snowstorm. She loses control of the car on an icy road and smashed 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.

◦The house is covered under liability, property damage. Damage to car is covered under collision [deductible of $250($8,000 – $250) so $7,750] Personal injury has $5,000 for each.

•(e)Alan is walking across a street and is struck by a motorist who fails to stop. He has bodily injuries of $5,000.

◦For the hit-and-run he would get personal insurance. It could be under medical pay or uninsured motorist. Would use uninsured because it is higher.

•(f)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.

◦Not covered under Alan's policy because the mechanic is in the business of dealing cars which is excluded under this policy. Garage would probably have own policy for this

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

◦Other than collision loss when it comes to hitting animals so $2,500 – deductible of $100 = $2,400

h. 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.

The camera and golf clubs are not covered. They are not covered because they are not specifically used for the car. For instance, a car phone charger would be but the cell phone is not. The window would be but the cost for repairs is below the deductible. There will be no pay out for this case.

i. Alan’s wife goes shopping at a 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 $2000.

This will be handled under her collision coverage. The amount paid by the insurance is going to be $1750 ($250 deductible taken out).

j. 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.

This would go against Alan’s job. He is on the job and is in the scope of his employment. Therefore his job is vicariously liable and all would go through them

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