1. James is driving Hanna’s car with permission. He runs a stop sign, hits another car and injures the other driver. The court awards a liability judgment of $40,000 against James. James and Hanna both have a personal automobile insurance policy with liability coverage limits as follows: $25,000/$50,000 BI (bodily injury) and $15,000 PD (property damage). How will the liability coverage between these two policies most likely be coordinated?

Select one:

a. James’s policy pays $40,000

b. Hanna’s policy pays $25,000, James’s policy pays $15,000

c. Hanna’s policy pays $40,000

d. James’s policy pays $25,000, Hanna’s policy pays $15,000

e. James’s and Hanna’s policy each pays $20,000

2. Jose has the personal automobile policy with liability limits as follows: $25,000/$50,000 BI (bodily injury) and $10,000 PD (property damage). Jose is held liable in an accident in which he must pay for bodily injuries as follows: Person A, $10,000, Person B, $30,000. How much his insurance company will pay for this accident?

Select one:

a. $25,000,

b. $35,000,

c. $40,000,

d. $50,000,

e. none of these.

No-fault auto insurance in the US may reduce auto costs because

Select one:

a. it will pay more people,

b. large losses will not be paid,

c. lawyer fees will increase,

d. small claims are taken out of the court

4.

The deductible used for automobile collision losses is an example of a(n)

Select one:

a. percentage deductible.

b. dollar limit.

c. straight deductible.

d. aggregate deductible.

3.