Fred Has an Automobile Liability Insurance Policy of $100,000 and an Umbrella

question 4

Multiple Choice

Fred has an automobile liability insurance policy of $100,000 and an umbrella policy with $1 million dollars in coverage.Fred is driving negligently and crashes into Barney's car.Barney suffers $500,000 in damages.How will the policies pay for the damages?

• A) The $500,000 will be paid directly from the umbrella policy.
• B) The first $100,000 will be paid from the automobile liability policy,and the remaining $400,000 will be paid from the umbrella policy.
• C) Barney will receive the $100,000 from the automobile liability policy,but nothing from the umbrella policy.
• D) Barney will receive $50,000 from the automobile liability policy and $450,000 from the umbrella policy.