Question

Ronaldo has 50/250 BI liability insurance. He loses control of his car and injures 18 children

Answer 1

Answer:

• The insurance company will pay $250,000 in total for this lawsuit.

• Ronaldo will be personally responsible for $110,000.

Explanation:

BI stands for bodily injury.

Bodily Injury liability insurance covers the damages caused to third parties (other drivers or persons not including you).

In the format 50/250, the first number is the amount covered for one person in the accident, and the second number is the limit that the insurance company covers in the same accident.

Since each child is awarded $20,000 as a result of a lawsuit, the total legal responsability is 18 × $20,000 = $360,000.

Hence, the limit of $ 250,000 covered by the insurance company is exceeded meaning that the insurance company will pay the limit of $250,000.

Therefore, Ronaldo will be personally responsible for the difference: $360,000 - $250,000 = $110,000.