Property & Casualty Insurance Exam (National Portion)Casualty InsuranceEasy
A client has a Personal Auto Policy (PAP) with Uninsured Motorist (UM) Bodily Injury limits of $50,000 per person / $100,000 per accident. The client is involved in an accident with an uninsured driver and suffers $70,000 in bodily injuries. Their passenger suffers $40,000 in bodily injuries. How much will the client's UM coverage pay for the client's injuries?
- A$100,000
- B$50,000
- C$40,000
- D$70,000
Show answer & explanationAnswer & explanation
Correct answer: B. $50,000
The Uninsured Motorist (UM) Bodily Injury coverage has a per-person limit of $50,000. Although the client's injuries total $70,000, the policy will only pay up to the per-person limit.
Why the other options are wrong
- A. This is the per-accident limit, which applies to the total, not individual claims when the individual claim exceeds the per-person limit.
- C. This is the amount for the passenger, not the client.
- D. This amount exceeds the per-person limit.
Uninsured Motorist (UM) Per-Person Limit
The maximum amount an Uninsured Motorist (UM) bodily injury coverage will pay for injuries sustained by any one person in an accident caused by an uninsured driver.
- Applies to bodily injury only.
- Protects insureds from financially irresponsible drivers.
- Separate per-person and per-accident limits apply.
Memory trick: UM coverage acts like a 'phantom' liability policy, but each injured person has their own 'wallet limit'.