1. Ann is the named insured on a PAP with the following coverage:

Liability $500,000. Combined, single limit

Medical Payments $2,000. per person

Uninsured and Underinsured Motorists $100,000. Single limit

For each of the situations described below, indicate the amount, if any, that Marys PAP would pay for the loss. Assume that Mary lives in a state that does not have no-fault insurance. Consider each situation separately.

1. Ann lends her car to her roommate. The roommate takes her car to Nogales, Mexico to celebrate Mardi Gras. The roommate becomes intoxicated and drives the car into a Mexican market, doing $50,000 in damages to the building and contents.

(3 points)

2. Ann was involved in an accident with another motorist. This injured person claims she did not have the right of way. The injured driver was awarded damages of $300,000. Legal defense costs incurred by her insurance company were $25,000. . How would each of these amounts be paid or why would they not be paid? (3 points)

1.

2.

3. A hit-and-run driver struck Anns son when he was walking to school. He will always walk with a limp and had to be home-schooled for six weeks before returning to school. The hospital bills were over $80,000. Take a reasonable guess at the amount paid under this policy. What coverages apply? (3 points)

4. Ann becomes an UBER driver, but does not inform her insurance company. She is involved in an accident which causes serious injury to her fare-paying passenger. What coverage, if any, is available to pay for the passengers medical bills? (3points)

1. List four benefits that are paid under a typical No-Fault law. (8 points)

2. List three situations that typically allow insurers to cancel automobile insurance policies. (6 points)

3. List five exclusions found under the auto insurance policy (5).