Paul Has a Personal Auto Policy with a Per-Person Liability

question 3

Multiple Choice

Paul has a personal auto policy with a per-person liability limit of $300,000.He also has a personal umbrella policy with a limit of $2,000,000 and a self-insured retention of $1,000.How much will be paid by each policy if a person wins a judgment of $500,000 against Paul as a result of bodily injury arising from the auto accident?

• A)The auto policy will pay nothing,and the umbrella policy will pay $449,000.
• B)The auto policy will pay $250,000,and the umbrella policy will pay $250,000.
• C)The auto policy will pay $300,000,and the umbrella policy will pay $199,000.
• D)The auto policy will pay $300,000,and the umbrella policy will pay $200,000.

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Definitions:

Penalty Kick

A method of restarting play in soccer, awarded for certain fouls within the penalty area, where a player kicks the ball from the penalty spot aiming to score against the opposing goalkeeper alone.

Kicker's Payoffs

Term used in game theory to describe the rewards or outcomes that a player (the "kicker") stands to gain from various actions.

Probability of Success

The likelihood or chance of an event or endeavor achieving its intended outcome or goal.

Probability of Failure

This refers to the likelihood that a system or component will fail to perform its intended function within a specified period.