Your Automobile Insurance Policy Contains Policy Limits of 200/300/100

question 101

Multiple Choice

Your automobile insurance policy contains policy limits of 200/300/100. If you have an accident in which you are deemed at fault and two people sustain bodily injuries that result in combined claims of $450,000, how much of the claim will not be covered under your insurance policy?

• A) $250,000
• B) $150,000
• C) $350,000
• D) $450,000

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Definitions:

Intangibles

Assets that do not have physical substance but are still valuable because of their intellectual property or other value to the firm.

Expensed

The act of charging a cost as an expense in the income statement in the period it is incurred.

Capitalized

Expenditures or costs that are added to the cost basis of a fixed asset on a company's balance sheet, rather than being expensed immediately.

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair value of its net identifiable assets.