How Much of a Major Auto Accident Loss Will Be Covered?

Ashley Diamond of Estes Park, Colorado, drives an eight-year-old Toyota valued at $5,600. She has a $75,000 personal automobile policy with $10,000 per-person medical payments coverage and both collision

($200 deductible) and comprehensive coverage.

David Smith of Loveland, Colorado, drives a four-yearold Chevrolet Malibu valued at $9,500. He has a 25/50/15 family automobile policy with $20,000 in medical payments coverage and both collision ($100 deductible) and comprehensive insurance. Late one evening, while he was driving back from Rocky Mountain National Park, David’s car crossed the centerline of the road, striking Ashley’s car and forcing it into a ditch.

David’s car also left the road and did extensive damage to the front of a roadside store. The following table indicates the damages and their dollar amounts.

Complete the following chart and use the information to answer these questions:

(a) How much will Ashley’s policy pay Ashley and Fran?

(b) Will subrogation rights come into play? In what way?

(c) How much will David’s bodily injury liability protection pay?

(d) To whom and how much will David’s property damage liability protection pay?

(e) To whom and how much will David’s medical protection pay?

(f) How much reimbursement will David receive for his car?

(g) How much will David be required to pay out of his own pocket?

Item Amount Bodily injuries suffered by Ashley $6,800 Bodily injuries suffered by Fran, a passenger in Ashley’s car 28,634 Ashley’s car 9,600 Bodily injuries suffered by David 2,700 Bodily injuries suffered by Cecilia, a passenger in David’s car 12,845 David’s car 9,500 Damage to the roadside store 14,123 DO IT IN CLASS Page 319 David Smith’s Accident: Who Pays What?

Coverage David’s Policy Ashley’s Policy Liability (limits) ___ ___ Bodily injury ___ ___ Ashley ___ ___ Fran ___ ___ Cecilia ___ ___ Medical payments (limits) ___ ___ David ___ ___ Ashley ___ ___ Fran ___ ___ Cecilia ___ ___ Collision coverage (limits) ___ ___ David’s car ___ ___ Ashley’s car ___ ___ David’s out-of-pocket expenses ___ ___ Fran’s bodily injury ___ ___ Excess property damage losses ___ ___ Collision insurance deductible ___ ___ TOTAL ___ ___ AppendixLO1