Student Question from Safiya J.
Course: Insurance Planning

## Student Question:

Hi Dan,

I hope you are doing well! I have a question about Question #8 (SHOWN BELOW) – what does the \$300,000 mean in the coverage amount? I thought that was the maximum bodily injury coverage, but I must not be understanding that because I’m not sure why it wouldn’t cover the full \$200,000 if the coverage goes to \$300,000. What exactly does the middle number mean? Thanks!

From the online content:

Joyce has auto insurance with Part A liability limits of \$100,000/\$300,000/\$50,000. Joyce runs into the back of a car on the highway (she is the 100% negligent driver) that totals the other driver’s car (a \$25,000 loss) and the other driver is awarded damages for bodily injury totaling \$200,000. Joyce’s car is also totaled (a \$30,000 loss) and she sustains injuries and subsequent medical bills totaling \$8,500. How much of the liability costs will her Part A coverage pay?

A: \$25,000
B: \$100,000
C: \$125,000
D: \$200,000
E: \$225,000

## Instructor Response:

Hi Safiya!

Good to hear from you.  That is exactly correct.  The \$300,000 is the maximum bodily injury coverage per accident.  The first number refers to bodily injury per person per accident, and the second is basically for all persons (if more than one).

In Question 8, the reason only \$100,000 of the \$200,000 bodily injury is covered is because of the \$100,000 per person maximum.  So it’s capped there.  If there had been two people that each had \$100,000 in bodily injury, then all \$200,000 would be covered.

Does that help clarify?  Please let me know.