Lois Larson Has Liability Coverage in Her Automobile Insurance Policy

question 89

Short Answer

Lois Larson has liability coverage in her automobile insurance policy of 50/100/50. She was at fault in an accident and two people in another car, Barbara and John Gibbons, were injured. In the lawsuit settlement, Barbara was awarded $30,000 and John, $70,000. Damages to the Gibbons' car amounted to $8,600. How much of the total claim will be Lois's responsibility?

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Definitions:

Variable Expenses

Costs or expenses that change in proportion to business activity levels or volume, such as sales commissions or raw material costs.

Traceable Fixed Expenses

Fixed costs directly associated with specific business segments, which would be eliminated if the segment was discontinued.

Net Operating Income

The amount of income generated from regular business operations after subtracting operating expenses but before taxes and interest.

Single Product

Refers to a business strategy or condition where a company focuses on producing and selling one specific product.