Question

Bill Buckely has​ split-limit 100​/200​/40 automobile liability insurance on his 2012 Subaru. Driving home from work in a​ snowstorm, he hit a​ Mercedes, slid into a​ guardrail, and knocked down a telephone pole. Damages to the​ Mercedes, the​ guardrail, and the telephone pole were ​$33,428​, ​$7,422​, and ​$12,041 respectively. How much will​ Bill's insurance company​ pay? How much will Bill be required to pay​ directly? ​Bill's insurance company will pay ​$nothing. ​(Round to the nearest​ dollar.) The amount Bill will be required to pay directly is ​$nothing. ​(Round to the nearest​ dollar.)

Answer 1

Answer:

• Bill's insurance company will pay $40,000

• The amount Bill will be required to pay directly is $12,891

Explanation:

A Split limit works thus;

The first figure which is 100 is the maximum amount that will be paid per one injured person.

The second figure is 200 and it is the maximum amount that will be paid out for all injured persons.

The third which is 40 is the maximum amount the insurance will pay out for property damage.

Bear in mind that all these figures are in thousands.

The damages to all the property involved is = 33,428 + 7,422 + 12,041

= $‭52,891‬

The Insurance company will therefore payout the maximum amount of $40,000.

The rest will be paid by Bill which is = 52,891 - 40,000

= $12,891