1) Joe has a PAP with the following coverages:
Lability coverages: 150/500/50
Medical payments coverage: $10,000 each person Uninsured motorist coverage: $50,000 each person
Collision loss: $500 deductible
Other-than-collision loss: $250 deductible
Towing and labor cost coverage $100 each disablement
To what extent, if any, is each of the following losses covered under Joe’s PAP? How much will Joe have to cover out-of-pocket? Be sure to address each of the losses in each question and give specific dollar amounts covered. Treat each event separately. Explain your answers.
A) Joe failed to stop at a red light and hit a van, which sustained damage of $13,500. There passengers in the van were injured and incurred the following bodily injuries: Passenger 1, $18,000 Passenger 2, $160,000 Passenger 3, $12,000 Joe was also injured and incurred medical bills of $11,000. Because of his injury, Joe was unable to work and lost $5,000 in wages.
C) Joe rents a car while on vacation. He is involved in an accident with another motorist when he fails to yield at a yield sign. The injured motorist is awarded judgement of $160,000. The rental agency only carries liability limits of $30,000 on the rental car. The rental agency does not carry collision insurance on its cars and is seeking $18,000 from Jana for repairs to the rental.
D) Joe borrows a friend’s car with permission and is in an accident with another motorist in which Joe is at fault. The cost of repairing the friend’s car is $5,000. The friend’s auto policy has a $1,000 deductible for collision losses and $500 for other-than-collision losses.
E) Joe is employed as a pharmaceutical representative and is furnished a company car. He is involved in an accident with another motorist while driving the company car during business hours. The injured motorist claims Joe is at fault and sues him for $150,000. Damage to the company car amounts to $6,000.