An example of liability limits on the PAP's Declaration page is $100,000 per person and what amount per occurrence?

An example of liability limits on the PAP's Declaration page is $100,000 per person and what amount per occurrence?

• A. $250,000
• B. $300,000
• C. $500,000
• D. $100,000

Answer: (B)

In a Personal Auto Policy (PAP), liability limits are structured to outline the maximum coverage available in the event that the insured is found liable for injuries or damages. The example given indicates a limit of $100,000 per person for bodily injury coverage, which refers to the maximum amount payable for injuries suffered by a single individual in an accident. Following this, the limit per occurrence refers to the total amount that will be covered for all claims arising from a single incident. In this case, with a liability limit of $100,000 per person, a typical corresponding amount per occurrence would be higher to account for multiple injured parties. The choice of $300,000 per occurrence reflects a common structure where the per occurrence limit is three times the amount allotted for an individual. This setup provides a safety net for situations where multiple people may be injured in one event, ensuring that total liabilities do not outpace the coverage provided by the policy. Therefore, in a scenario where there are serious accidents involving multiple claimants, having a per occurrence limit of $300,000 ensures that the insured has sufficient coverage to potentially cover claims made by more than one person, thereby aligning with typical insurance practices found in personal auto policies.

In a Personal Auto Policy (PAP), liability limits are structured to outline the maximum coverage available in the event that the insured is found liable for injuries or damages. The example given indicates a limit of $100,000 per person for bodily injury coverage, which refers to the maximum amount payable for injuries suffered by a single individual in an accident.

Following this, the limit per occurrence refers to the total amount that will be covered for all claims arising from a single incident. In this case, with a liability limit of $100,000 per person, a typical corresponding amount per occurrence would be higher to account for multiple injured parties. The choice of $300,000 per occurrence reflects a common structure where the per occurrence limit is three times the amount allotted for an individual. This setup provides a safety net for situations where multiple people may be injured in one event, ensuring that total liabilities do not outpace the coverage provided by the policy.

Therefore, in a scenario where there are serious accidents involving multiple claimants, having a per occurrence limit of $300,000 ensures that the insured has sufficient coverage to potentially cover claims made by more than one person, thereby aligning with typical insurance practices found in personal auto policies.