Alberto has HO$-3$ contract with $$100,000$ of Liability Coverage. He is ordered by a judge to pay his neighbor $$162,000$ because of bodily injuries the neighbor suffered while he and Alberto were fishing in Alberto's old, undeclared $35$ horse$-$power outboard motor boat. How will the contract respond?

Nothing is paid because liability arising out of this boat is excluded.

$($B$)$ $$100,000$ is paid to the neighbor by the insurance company.