A Florida homeowner has a Personal Auto Policy (PAP) with liability limits of $100,000 per person / $300,000 per accident for bodily injury, and $50,000 for property damage. The homeowner is involved in an at-fault accident, injuring two people. Person A sustains $150,000 in bodily injuries, and Person B sustains $50,000 in bodily injuries. The property damage to the other vehicle is $40,000. How much will the PAP pay for bodily injuries in this accident?
- A$150,000
- B$300,000
- C$100,000
- D$200,000
Show answer & explanationAnswer & explanation
Correct answer: A. $150,000
The PAP has split limits of $100,000 per person and $300,000 per accident for bodily injury. Person A's injuries are $150,000, but the 'per person' limit restricts payment to $100,000 for that individual. Person B's injuries are $50,000, which is within the 'per person' limit. The total paid for bodily injuries would be $100,000 (for Person A) + $50,000 (for Person B) = $150,000. This total is also within the $300,000 'per accident' limit.
Why the other options are wrong
- B. This is the 'per accident' limit, but the 'per person' limit restricts the payment for Person A, so the total payout is less.
- C. This only covers the maximum for one person, ignoring the second injured party.
- D. This amount is incorrect based on applying the per person limit to Person A.
PAP Bodily Injury Split Limits
Personal Auto Policy liability limits expressed as three numbers: the maximum paid per person for bodily injury, the maximum paid per accident for bodily injury, and the maximum paid per accident for property damage.
- First number: BI per person limit.
- Second number: BI per accident limit.
- Third number: PD per accident limit.
- Each limit is a maximum, not necessarily the payout.
Memory trick: PAP Limits: Split (per person, per accident, property) or Combined (one big pot).