5. Computing your liability - An auto insurance example Although car insurance is legally required by all states, the coverage provided by different policies can vary dramatically, such that even an "insured" motorist can end up paying large amounts of money out-of-pocket. Consider the following example involving Ralph, who has a family auto policy (FAP) that provides liability coverage with limits of 15/30/15, no medical payment insurance, and uninsured and underinsured motorist coverage with limits of 1/2. He has collision and comprehensive auto insurance, both with a deductible of $100. Suppose one day Ralph falls to notice a red light, causing him to blind-side another car crossing the intersection. Fortunately, he is not badly injured, but the medical bill for his hospital examination nonetheless amounts to $624. The driver of the other car, a woman named Julia, suffered severe Injuries from the direct impact of the accident. She required surgery and a hospital stay and then additional procedures in the months that followed. Her medical bills, plus compensation for being unable to work, totaled $32,634. Julia's insurance company successfully filed a claim against Ralph, exercising subrogation rights. Coverage A of Ralph's plan will reimburse him for Julia's medical bills. Ralph's medical are Ralph's car was relatively unharmed by the collision but required $800 in minor repairs; Julia's car was destroyed, making Ralph liable for paying the $9,300 replacement value. Julia's car was pushed onto a nearby sidewalk on impact, destroying a nearby lawn and causing additional damage to a parked car. This damage totaled $7.254. Ralph's liability coverage also will reimburse him for up to $ in property damage, so he is responsible for paying pocket in property liability damages. Which of the following is true regarding the damage to his own car? out-of- It will be reimbursed up to the difference between his liability coverage and the damage to other property. It will be reimbursed fully, minus the $100 deductible. It is not covered under his policy