George has a personal auto policy that provides the following coverages: liabili

Question

George has a personal auto policy that provides the following coverages: liability coverage $100,000/$300,000/$50,000, $5,000 medical payments coverage, $25,000/$50,000 uninsured motorists coverage, $200 deductible for a collision loss, and a $50 deductible for an other-than-collision loss. With respect to each of the following situations, indicate whether or not the losses are covered, and if possible, the dollar amounts that would be paid by the insurance company. Assume that each situation is a separate event. Clearly identify what section of the policy is controlling and why the event is either covered or not covered.

George's mother borrows his car to go to McDonalds. she spills hot coffee on herself and the car seat as she is pulling away from the pick up window. Her emergency room bills total $1600. the car seat will cost $400 to clean?

Explanation / Answer

Libaility coverage will not cover losses under the circumstances of the event described in the problem. Liability coverages are of two types, namely bodily injury and property damage

Bodily Harm : If the insurance holder is involved in an accident and that causes bodily harm to the other party, then the insurance holder's insurer pays for bodily harm to the other party under this clause.

Property Damage: If the insurance holder is involved in an accident that causes property damage to others, the insurer for the insurance holder pays damages to the other party under this clause.

Uninsured motorist coverages will not apply either because this clause pays for damages caused to insurance holder in case of injury or property damage received due to accident caused by some other negligent driver. That clearly is not the case and hence not applicable.

Medical payment insurance pays for injuries received in any type of car accident regardless of who is at fault. Hence, this section of the policy helps cover Georges mother's emergency bill of $1600. However, since the policy mentiones that $50 is deductible in case of non-collision losses, the same amount would be deducted from her emergency room expenses. Further, her car cleaning cost of $400 will not be covered under any section of the policy as it is not a collision or non-collision loss.

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