Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client has an auto insurance policy with Uninsured Motorist (UM) Bodily Injury limits of $50,000 per person / $100,000 per accident. If the client is hit by an uninsured driver and sustains $60,000 in medical bills and lost wages, how much would their UM policy pay for their injuries?
- A$0, as UM only covers property damage.
- B$50,000
- C$100,000
- D$60,000
Show answer & explanationAnswer & explanation
Correct answer: B. $50,000
The Uninsured Motorist Bodily Injury coverage has a per-person limit of $50,000. Even though the client's damages are $60,000, the policy will only pay up to the per-person limit.
Why the other options are wrong
- A. UM Bodily Injury specifically covers injuries; UM Property Damage is a separate coverage.
- C. This is the per-accident limit, which applies if multiple people are injured, but the per-person limit restricts payment for a single individual.
- D. This is the total amount of damages, but the policy will not pay beyond its per-person limit.
Uninsured Motorist (UM) Bodily Injury
Coverage that pays for an insured's bodily injury damages caused by an at-fault driver who does not have liability insurance.
- Covers medical expenses, lost wages, and pain and suffering.
- Applies when the other driver is uninsured.
- Subject to per-person and per-accident limits.
- Does not cover property damage unless specifically added as UM Property Damage.
Memory trick: Uninsured Maximums Protect Injured Persons.