Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client is involved in an accident where their vehicle sustains $15,000 in damages. The at-fault driver is uninsured. The client's Personal Auto Policy (PAP) has Uninsured Motorist Property Damage (UMPD) with a limit of $10,000 and a $500 deductible. How much will the client's UMPD coverage pay?
- A$9,500
- B$15,000
- C$10,000
- D$14,500
Show answer & explanationAnswer & explanation
Correct answer: A. $9,500
UMPD coverage pays for property damage to the insured's vehicle when hit by an uninsured driver, up to its limit and subject to a deductible. The damages are $15,000, but the UMPD limit is $10,000. So, the maximum payable before the deductible is $10,000. After applying the $500 deductible, the UMPD coverage will pay $10,000 - $500 = $9,500.
Why the other options are wrong
- B. This is the total damages, ignoring both the UMPD limit and the deductible.
- C. This is the UMPD limit, but the deductible has not been applied.
- D. This incorrectly subtracts the deductible from the total damages, ignoring the UMPD limit.
Uninsured Motorist Property Damage (UMPD)
Uninsured Motorist Property Damage (UMPD) coverage pays for damage to the insured's vehicle caused by an identified at-fault uninsured motorist. It is typically subject to a separate limit and a deductible.
- Covers property damage to the insured's vehicle.
- Triggered by an at-fault uninsured driver.
- Subject to a specific limit for property damage.
- A deductible usually applies.
Memory trick: UMPD is for YOUR car damage from a GHOST driver, with a limit and a bite.