$5.$ Computing your liability $-$ An auto insurance example

Although car insurance is legally required by all states, the coverage provided by different policies can vary dramatically, such that even an $$insured$$ motorist can end up paying large amounts of money out$-$of$-$pocket. Consider the following example involving Nick, who has a family auto policy $($FAP$)$ that provides liability coverage with limits of $50/100/50,$ no medical payment insurance, and uninsured and underinsured motorist coverage with limits of $1/3.$ He has collision and comprehensive auto insurance, both with a deductible of $$500.$

Suppose one day Nick swerves to avoid a cat on the freeway and smashes into the car on his right. He breaks multiple ribs and is taken to the emergency room. Although he suffered no long$-$term damage, his medical bills totaled $$1,938.$ The driver of the other car, a woman named Kathy, was struck directly by Nick$$s car and suffered from multiple severe injuries that rendered her unable to work for nearly a year. Her medical bills, plus compensation for being unable to work, totaled $$135,947.$ Kathy$$s insurance company successfully filed a claim against Nick, exercising subrogation rights.

Coverage A of Nick$$s plan will reimburse him with for Kathy$$s medical bills. Nick$$s medical bills are $.$

Nick$$s car was badly damaged and required $$6,845$ in repairs; Kathy$$s car was destroyed, making Nick liable for paying the $$18,900$ replacement value. Furthermore, Kathy$$s car was pushed into a freeway divider, destroying a significant portion of the structure. This damage totaled $$32,894.$

Nick$$s liability coverage also will reimburse him for up to $

in property damage, so 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?

It is not covered under his policy.

It will be reimbursed fully, minus the $$500$ deductible.

It will be reimbursed up to the difference between his liability coverage and the damage to other property.