What is the maximum amount Travis's insurer will pay for an accident causing $35,000 in bodily injury and $60,000 in property damage, given a limit of $75,000?

Prepare for the Auto Insurance Exam with study tips, flashcards, and multiple-choice questions. Each question includes hints and explanations to ensure you're exam-ready!

The maximum amount that Travis's insurer will pay for the accident is determined by the policy limit, which in this case is set at $75,000. This means that regardless of the total costs incurred, the insurer will not pay more than this amount in coverage.

In this scenario, the two categories of damages incurred are $35,000 for bodily injury and $60,000 for property damage, which add up to a total of $95,000. However, since there is a policy limit of $75,000, the insurer will provide coverage only up to this limit. Therefore, the insurer will pay a maximum of $75,000 towards the total damages.

Understanding the concept of policy limits is crucial in auto insurance, as these limits define the maximum payout for claims. This helps people assess their coverage needs and ensures they have sufficient protection against potential liabilities.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy