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

question 53

Essay

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 injury 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:

Credit Entry

An accounting entry that increases a liability or equity account, or decreases an asset or expense account, recorded on the right side of an account.

Asset Accounts

Accounts on a balance sheet that represent the resources owned by a company, which have value and can provide future benefits.

Common Stock

Equity ownership in a corporation, entitling holders to vote at shareholder meetings and to receive dividends.

T-account

A visual representation used in accounting to depict the debit and credit sides of an account.