Insurance

| December 3, 2015

7. Sandra believes that her husband is a reckless driver. She worries about what would happen if he were ever in a serious car accident. If Ken is involved in a car accident and causes physical harm to another motorist in the amount of $300,000, how much will be paid from the personal automobile policy (PAP) and how much from the excess liability policy? Show your computations.

7A. $300,000 PAP and $0 excess liability

7B. $0 PAP and $300,000 excess liability

7C. $150,000 PAP and $150,000 excess liability

7D. $50,000 PAP and $250,000 excess liability

7E. $250,000 PAP and $50,000 excess liability

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