Property & Casualty Insurance Exam (National Portion)Casualty InsuranceHard
A client's auto policy has a bodily injury liability limit of $100,000 per person / $300,000 per accident. The client causes an accident, injuring two people. Person A incurs $120,000 in damages and Person B incurs $80,000 in damages. How much will the policy pay for Person A's injuries?
- A$100,000
- B$120,000
- C$150,000
- D$80,000
Show answer & explanationAnswer & explanation
Correct answer: A. $100,000
The bodily injury liability coverage has a per-person limit of $100,000. Even though Person A's damages are $120,000, the policy will only pay up to the per-person limit of $100,000.
Why the other options are wrong
- B. The policy will not pay more than its stated per-person limit, regardless of the total damages.
- C. This amount is not derived from the policy limits or the specific damages to Person A.
- D. This is Person B's damages, not Person A's.
Per-Person Liability Limit (Auto)
The maximum amount an auto insurance policy will pay for bodily injury to any one person in a single accident, regardless of the total damages or the per-accident limit.
- It is the first number in a split-limit liability policy (e.g., 100/300/50).
- This limit applies individually to each injured person.
- If damages exceed this limit, the insured is responsible for the difference.
- It is always the first constraint applied when calculating bodily injury payouts.
Memory trick: Each Person's Payout Has a Strict Limit.