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 $70,000 in bodily injuries. Their passenger suffers $40,000 in bodily injuries. What is the maximum amount the policy will pay under UM Bodily Injury coverage for this accident?
- A$110,000
- B$100,000
- C$50,000
- D$90,000
Show answer & explanationAnswer & explanation
Correct answer: D. $90,000
The UM Bodily Injury limits are $50,000 per person / $100,000 per accident. For the client, the policy pays the per-person limit of $50,000 (since $70,000 > $50,000). For the passenger, the policy pays the full $40,000 in injuries. The total payout is $50,000 + $40,000 = $90,000. This amount is within the $100,000 per-accident limit.
Why the other options are wrong
- A. This incorrectly sums the full injury amounts for both individuals, disregarding the per-person limit for the client.
- B. This is the per-accident limit, but the actual payout for these specific injuries is less than this limit.
- C. This only represents the per-person limit, not the total for the accident.
Uninsured Motorist (UM) BI Payout
Uninsured Motorist (UM) Bodily Injury coverage pays for medical expenses, lost wages, and pain and suffering for the insured and their passengers when injured by an at-fault uninsured driver, up to the policy's split limits.
- Protects insured and passengers from uninsured drivers.
- Covers bodily injury damages.
- Subject to per-person and per-accident limits.
- Pays what the uninsured driver's liability insurance *would have* paid.
Memory trick: UM acts like the 'ghost' insurance of the at-fault driver, using *your* limits.