Assume that Herb Avoir, the vegetarian, owns the PAP discussed in this chapterand reproduced as Appendix B. His policy has the following limits:

A = $100,000

B = $3,000

C = $100,000

D = $250 deductible--collision

$100 deductible--other than collision

Assume that each of the events described in the following situations occurs separately. The actual cash value of Herbs car is $14,500. You are to calculate the amount Herb's insurer will pay.

1. Herb negligently collides with a farm tractor. The tractor is on the highway to get from one farm to another. Herb was at fault. The farmer successfully sues for $80,000 in bodily injury and $21,000 in property damage to his tractor. The lawyers charge $10,000 to defend Herb in court.

Answer:

Insurance will pay up to the limit of policy A. $100,000 plus the additional 10,000 the lawyers charge.

2. Herb runs a STOP sign and collides with a parked auto causing $4,000 of damage to each vehicle. Answer:

The $4,000 in damages to other car is covered as a property liability claim. $4,000 damage to herbs auto is covered as a collision claim. $250 deductible will be tied to collision claim. Insurance pays value of $7,750 in total.

3. While using his auto as a delivery vehicle for a local florist, Herb is struck by an uninsured motorist. He has $15,000 in medical expenses and lost wages. His auto is destroyed(replacement value is $16,000).

Answer:

This in not covered because Herb is using the automobile for public conveyance

4. Herb borrows his neighbors car fora week while the neighbor is on vacation.

Answer:

5. Herb hits a deer on Door County Highway A. His car is destroyed.

Answer: