Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

1. Michael has a PAP (Personal Auto Policy) with liability limits of $50,000/$10

ID: 416084 • Letter: 1

Question

1. Michael has a PAP (Personal Auto Policy) with liability limits of $50,000/$100,000/$25,000 (or 50/100/25). Michael failed to stop for a stop sign and hit a pickup truck. The pickup truck had damages totaling $20,000. Two passengers in the truck were injured and incurred the following bodily injury damages:

Passenger A: $60,000

Passenger B: $25,000

Michael was also injured and incurred medical bills of $10,000. His car was damaged to the tune of $15,000. Michael had to rent a car for 30 days which cost him $600.

How much will Michael's insurer pay under the PAP's Liability (Part A) section of his auto policy? Please explain your answer.

Explanation / Answer

The coverage under PAP’s Liability (Part A) is up to $105000