Personal automobile policy coverage. Zachary Lee has a personal automobile policy [PAP] with coverage of $25,000/$50,000 for bodily injury liability, $25,000 for property damage liability, $5,000 for medical payments, and a $500 deductible for collision insurance. How much will his insurance cover in each of the following situations? Will he have any out-of-pocket costs? Zachary loses control and skids on ice, running into a parked car and causing $3,785 damage to the unoccupied vehicle and $2,350 damage to his own car. Zachary runs a stop sign and causes a serious auto accident, badly injuring two people. The injured parties win lawsuits against him for $30,000 each. Zachary’s 18-year old son borrows his car. He backs into a telephone pole and causes $450 damage to the car.

Bodily injury liability is a liability that occurs when you are at fault in a car accident, medical…

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Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter10: Protecting Your Property

Section: Chapter Questions

Problem 6FPE

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Personal automobile policy coverage. Zachary Lee has a personal automobile policy [PAP] with coverage of $25,000/$50,000 for bodily injury liability, $25,000 for property damage liability, $5,000 for medical payments, and a $500 deductible for collision insurance. How much will his insurance cover in each of the following situations? Will he have any out-of-pocket costs?

Zachary loses control and skids on ice, running into a parked car and causing $3,785 damage to the unoccupied vehicle and $2,350 damage to his own car.
Zachary runs a stop sign and causes a serious auto accident, badly injuring two people. The injured parties win lawsuits against him for $30,000 each.
Zachary’s 18-year old son borrows his car. He backs into a telephone pole and causes $450 damage to the car.

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