Valerie purchased a Personal Auto Policy with liability limits of 75/150/25. She ran a stop sign andhit another vehicle. The following losses occurred:- Valerie's vehicle sustained $10,000 in damages.- Valerie incurred $20,000 in medical expenses.The other vehicle was totalled with $40,000 in damages.Passenger #1 in the other vehicle suffered $20,000 in bodily injuries.Passenger #2 in the other vehicle sliffered $100,000 in bodily injuries.- Passenger #3 in the other vehicle suffered $40,000 in bodily injuries.How much will Valerie's insurer pay under Part A-Liability Coverage?O $160,000O $180,000O $230,000O $200,000

The liability coverage limits are mentioned as 75/150/25 , which means:Bodily injury liability per…

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How much will Valerie's insurer pay under Part A-Liability Coverage? O $160,000 O $180,000 O $230,000 O $200,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Valerie purchased a Personal Auto Policy with liability limits of 75/150/25. She ran a stop sign and
hit another vehicle. The following losses occurred:
- Valerie's vehicle sustained $10,000 in damages.
- Valerie incurred $20,000 in medical expenses.
The other vehicle was totalled with $40,000 in damages.
Passenger #1 in the other vehicle suffered $20,000 in bodily injuries.
Passenger #2 in the other vehicle sliffered $100,000 in bodily injuries.
- Passenger #3 in the other vehicle suffered $40,000 in bodily injuries.
How much will Valerie's insurer pay under Part A-Liability Coverage?
O $160,000
O $180,000
O $230,000
O $200,000

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Step 1: consider the policy limits and the total amount of damages and injuries incurred in the accident

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Step 2: Analysis of Losses

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Step 3: Types of damage

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Step 4: Comparision of above totals to policy limits

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Step 5: Distribution among the injured parties

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Step 6: Therefore the Total liability

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