Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client's Personal Auto Policy (PAP) has Uninsured Motorist (UM) Bodily Injury limits of $50,000 per person / $100,000 per accident. The client is hit by an uninsured driver and suffers $75,000 in bodily injuries. A passenger in the client's car also suffers $40,000 in bodily injuries. How much will the client's UM coverage pay for the client's injuries?
- A$50,000
- B$75,000
- C$0
- D$40,000
Show answer & explanationAnswer & explanation
Correct answer: A. $50,000
Uninsured Motorist (UM) Bodily Injury coverage has per-person limits. Even though the client suffered $75,000 in injuries, the policy's per-person limit for UM is $50,000. Therefore, the policy will pay a maximum of $50,000 for the client's injuries.
Why the other options are wrong
- B. Incorrect; this is the full amount of the client's injuries but exceeds the per-person limit.
- C. Incorrect; UM coverage applies when the at-fault driver is uninsured.
- D. Incorrect; this is the passenger's injury amount, not the client's payout.
Uninsured Motorist (UM) Per-Person Limit
The maximum amount an Uninsured Motorist (UM) Bodily Injury policy will pay for bodily injuries sustained by any one person in an accident caused by an uninsured driver.
- Applies to each individual injured person.
- Cannot be exceeded for a single person's injuries.
- Part of UM split limits (per person/per accident).
Memory trick: UM limits are like a 'ghost driver' protection plan: each person has their own cap, and the accident has a total cap.