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 Xavier, who has a family auto policy $($FAP$)$ that provides liability coverage with limits of $\frac{15}{30}\frac{?}{15},$ no medical payment insurance, and uninsured and underinsured motorist coverage with limits of $\frac{1}{2}.$ He has collision and comprehensive auto insurance, both with a deductible of $$100.$

Suppose one day Xavier fails to notice a red light, causing him to blind$-$side another car crossing the intersection. Fortunately, he is not badly injured, but the medical bill for his hospital examination nonetheless amounts to $$624.$ The driver of the other car, a woman named Ana, suffered severe injuries from the direct impact of the accident. She required surgery and a hospital stay and then additional procedures in the months that followed. Her medical bills, plus compensation for being unable to work, totaled $$32,634.$ Ana's insurance company successfully filed a claim against Xavier, exercising subrogation rights.

Coverage A of Xavier's plan will reimburse him with for Ana's medical bills. Xavier's medical bills are not covered

Xavier's car was relatively unharmed by the colli

$$15,000$ quired $$800$ in minor repairs; Ana's car was destroyed, making Xavier liable for paying the $$9,300$ replacement value. Ana's shed onto a nearby sidewalk on impact, destroying a nearby lawn and causing additional damage to a parked car. This $$32,634$ taled $$7,254.$

$$30,000$