Financial Planning Exercise $5$

Personal automobile policy coverage

Travis Sierra has a personal automobile policy $($PAP$)$ with coverage of $$15,\frac{000}{\text{\$}}30,000$ for bodily injury liability, $$15,000$ for property damage liability, $$5,000$ for

medical payments, and a $$500$ deductible for collision insurance. How much will his insurance cover in each of the following situations? Will he have any out$-$of$-$pocket

costs? Round the answers to the whole dollar, if necessary. Leave no cells blank, be sure to enter $"0"$ wherever required.

a$.$ Travis loses control and skids on ice, running into a parked car and causing $$2,705$ damage to the unoccupied vehicle and $$2,785$ damage to his own car.

Total paid by the insurance company:

Travis's out$-$of$-$pocket costs:

b$.$ Travis runs a stop sign and causes a serious auto accident, badly injuring two people. The injured parties win lawsuits against him for $$36,000$ each.

Total paid by the insurance company:

c$.$ Travis' $18-$year$-$old son borrows his car. He backs into a telephone pole and causes $$1,450$ damage to the car.

Total paid by the insurance company: