10. Computing your liability An auto insurance example What are the possible consequences of your automobile policy coverage choices? Many states mandate minimum limits for several insurance coverages, but these limits rarely provide sufficient protection for you as the insured or for others who may be affected by your actions and decisions. Many drivers have insufficient coverage-even though their limits exceed the state minimum. Consider the consequences of Nick's insurance coverage decisions below. Nick has a Personal Automobile Policy (PAP) that provides liability coverage with limits of $50/100/50, no medical payment Insurance, and uninsured and under insured motorist coverage with limits of $100/300. He has collision and comprehensive coverage, both of which have a $500 deductible. Suppose one day Nick fails to notice a red light, causing him to blindside another car crossing the intersection. Fortunately, he is not badly injured, but the medical bill for his hospital examination nonetheless amounts to $1,938. The driver of the other car, a woman named Rosa, suffered severe injuries from the direct Impact of the accident, requiring an initial surgery, an extended hospital stay, and additional physical therapy procedures for several subsequent months. The total of her medical bills, plus compensation for being unable to work for nearly a month, totaled $135,947. Rosa's Insurance company successfully filed a claim against Nick by exercising subrogation rights. of Rosa's medical bills. Nick's medical bilis Coverage A of Nick's plan will reimburse him for Nick has a Personal Automobile Policy (PAP) that provides liability cow and underinsured motorist coverage with limits of $100/300. He has Suppose one day Nick fails to notice a red light, causing him to blinds the medical bill for his hospital examination nonetheless amounts to injuries from the direct impact of the accident, requiring an initial sur several subsequent months. The total of her medical bills, plus comp insurance company successfully filed a claim against Nick by exercisi Coverage A of Nick's plan will reimburse him for of RO $0 $50,000 Nick's car was relatively unharmed by the co quired 1 paying the $10,400 replacement value. Rosa $100,000 causing additional damage to a parked car. T 135,947 totaled ushed up exercising subrogation rights. of Rosa's medical bills. Nick's medical bills are covered under Part A are covered under Part C quired 1,200 in minor repairs. Rosa's car was -shed up onto a nearby sidewalk on impact, de are not covered by his policy totaled $8,693. Nick's car was relatively unharmed by the collision but required 1,200 in minor repairs. Rosa's car was destroyed, making Nick liable for paying the $10,400 replacement value. Rosa's car was pushed up onto a nearby sidewalk on Impact, destroying a nearby lawn and causing additional damage to a parked car. This damage totaled $8,693 Nick's liability coverage also will reimburse him for up to worth of property damage. Therefore, he is responsible for paying out-of-pocket in property liability damages. Which of the following is true regarding the damage to his own car? O It is not covered under his policy It will be reimbursed fully, minus the $500 deductible O It will be reimbursed up to the difference between his liability coverage and the damage to other property. Nick's liability coverage also will reimburse him for up to worth of property damage. Therefore out-of-pocket in property liability damages the following is true regarding the damag $20,000 O It is not covered under his policy. $30,000 O It will be reimbursed fully, minus the $500 dedy $50,000 O It will be reimbursed up to the difference between his liability coverage and the damage to other pr Nick's liability coverage also will reimburse him out-of-pocket in property liabilit $0 is not covered under his policy. $25,907 will be reimbursed fully, minus the $29,707 will be reimbursed up to the differe