Copyright © 2008, The McGraw-Hill Companies, Inc.
- Lana has comprehensive coverage on her car, which is stolen. The car’s value was $18,735 and her deductible was
$500. How much will her insurance company pay for this claim? - Ellen has a homeowner’s insurance policy with a $750 deductible. Vandals break one of the windows, causing $450 in
damage. How much will her insurance policy pay if she fi les a claim for this? - Landervan Home Improvements carries a $75,000 liability insurance policy. While doing electrical work on a home, one
of the company’s workers caused a fi re that led to $40,000 in damages. How much of the company’s liability will be
covered by the policy? - A restaurant carries a $250,000 general liability policy. One morning, a waitress tripped while carrying a pot of very
hot coffee and spilled it on a customer, causing serious burns. The customer sued the restaurant and was awarded
$380,000 in damages. How much of these damages will the business have to pay? - Sylvia carries a 200/500 automobile liability policy. In an accident, she injures someone who is awarded $280,000 in
damages for his injuries. How much of these damages will her policy cover? - Jake carries a 100/250 automobile liability policy. He injures three people in a car accident, each of whom is awarded
$75,000 for injuries. How much of these damages will Jake’s policy cover? - Efren carries a 75/250 automobile liability policy. In an accident, he is responsible for injuring three people, who are
each awarded $80,000 in damages for their injuries. How much will his insurance policy cover? How much will he have
to pay himself? - Sarah carries a 50/150 automobile liability policy. She injures two people in an accident, one of whom is awarded
$75,000 in damages, and the other of whom is awarded $45,000. How much will her insurance cover? How much will
she have to pay herself? - Dana carries a 25/50/35 automobile liability policy. In an accident for which she is found to be responsible, the other
motorist was injured and was awarded $48,000 for his injuries and $10,000 for damage to his car. How much of these
damages will Dana’s insurance cover? How much will she be left to pay herself? - Glenn carries a 100/300/50 automobile liability policy. He is responsible for an accident in which three people are
injured. One person is awarded $125,000 in damages for her injuries, while the other two are each awarded $50,000.
He also did $25,700 worth of damage to the other motorist’s cars. How much of these damages will Glenn’s insurance
cover? How much will he be left to pay himself? - Suppose that Sylvia (from Exercise 24) also has a $1 million umbrella policy. How does that change your answer to
Exercise 24? - Suppose that Glenn (from Exercise 29) also has a $1 million umbrella policy. How does that change your answer to
Exercise 29?
Exercises 13.1 535