California Property & Casualty Broker-AgentCasualty InsuranceEasy
A client has a Personal Auto Policy with liability limits of $50,000/$100,000/$25,000. They are involved in an at-fault accident that causes $75,000 in bodily injury to one person, $30,000 in bodily injury to a second person, and $40,000 in property damage. How much will their policy pay for the bodily injury claims?
- A$125,000
- B$105,000
- C$100,000
- D$80,000
Show answer & explanationAnswer & explanation
Correct answer: C. $100,000
The policy has a per-person bodily injury limit of $50,000 and a per-accident bodily injury limit of $100,000. Although the first person sustained $75,000 in injuries, the policy will only pay $50,000 for that individual. The second person's $30,000 injury is fully covered. The total bodily injury payout ($50,000 + $30,000 = $80,000) is within the $100,000 per-accident limit.
Why the other options are wrong
- A. This is an incorrect calculation and does not adhere to the policy limits.
- B. This incorrectly adds the full $75,000 to the $30,000, exceeding the per-person limit for the first individual.
- D. This is the correct calculation for the total bodily injury payment, which is within the per-accident limit.
Split Limits (Bodily Injury)
Split limits for bodily injury specify a maximum amount payable per person and a maximum total amount payable per accident for bodily injuries.
- First number: maximum per person bodily injury.
- Second number: maximum per accident bodily injury.
- Third number: maximum per accident property damage.
Memory trick: Per-person first, then per-accident, finally property.