Al Smith, who lives in Territory five, carries 10/20/5 compulsory liability insurance along with optional collision that has a $300 deductible. Al, who was at fault in an accident, caused $4,000 damage to the other auto, as well as $900 damage to his own. Also, the courts awarded $15,000 and $7,000 respectively to the two passengers in the other car for personal injuries. Al is responsible to pay a total of:
Answer
$5,000
$5,600
$2,000
$2,300
To calculate the total amount Al is responsible to pay, we need to add up the damages to the other car, damages to his own car, and the personal injury awards to the passengers.
Damages to the other car: $4,000
Damages to Al's own car: $900
Personal injury award for passenger 1: $15,000
Personal injury award for passenger 2: $7,000
Total damages Al is responsible for:
$4,000 + $900 + $15,000 + $7,000 = $26,900
However, Al has compulsory liability insurance of $10,000 for bodily injury per person, $20,000 for bodily injury per accident, and $5,000 for property damage per accident.
Since Al was at fault in the accident, his insurance will cover part of the damages. The insurance will cover $10,000 for bodily injury to one passenger, $20,000 total bodily injury for all passengers, and $5,000 for property damage.
Remaining damages to be paid by Al:
$26,900 - $10,000 (bodily injury coverage) - $5,000 (property damage coverage) = $11,900
Therefore, Al is responsible to pay a total of $11,900.
To calculate the total amount that Al Smith is responsible to pay, we need to consider the different types of damages and insurance coverage.
1. Property Damage:
- Al caused $4,000 damage to the other auto and $900 damage to his own. For the other auto, Al's compulsory liability insurance will cover the first $10,000.
- Since Al's $10,000 insurance coverage is more than the $4,000 damage, the insurance will cover the entire amount. Al doesn't have to pay anything for the property damage of the other car.
- For his own car, Al's collision insurance will cover the $900 damage after subtracting the $300 deductible. Therefore, Al also doesn't have to pay anything for the damage to his own vehicle.
2. Personal Injury:
- The courts awarded $15,000 and $7,000 respectively for the two passengers' personal injuries in the other car.
- Al's compulsory liability insurance covers $20,000 per person and $40,000 per accident for bodily injuries. Since the total awarded amount is below these limits, the insurance will cover the entire amount. Al doesn't have to pay anything for the personal injury damages.
Considering all the above points, Al doesn't have to pay anything for the accident damages. Therefore, the correct answer is:
$0