If Jane causes an at-fault accident while driving Mary's car, with Mary's liability limits of 10/20/10 and Jane's 100/300/100, and Bob has $40,000 in bodily injury, how much will be collected from Jane's policy?

If Jane causes an at-fault accident while driving Mary's car, with Mary's liability limits of 10/20/10 and Jane's 100/300/100, and Bob has $40,000 in bodily injury, how much will be collected from Jane's policy?

• A. $30,000
• B. $10,000
• C. $50,000
• D. $20,000

Answer: (A)

When a driver uses someone else’s car and is at fault, the owner’s liability coverage pays first (primary), up to its limits, and the at-fault driver’s policy pays the remaining amount as excess up to its own limits (secondary). Bob’s bodily injury claim is $40,000. Mary’s policy has a per-person BI limit of 10,000, so it can pay only up to 10,000 to Bob. The remaining 30,000 would be covered by Jane’s policy, which has a per-person BI limit of 100,000, so paying 30,000 is well within Jane’s coverage. Therefore, the amount collected from Jane’s policy is 30,000.

When a driver uses someone else’s car and is at fault, the owner’s liability coverage pays first (primary), up to its limits, and the at-fault driver’s policy pays the remaining amount as excess up to its own limits (secondary).

Bob’s bodily injury claim is $40,000. Mary’s policy has a per-person BI limit of 10,000, so it can pay only up to 10,000 to Bob. The remaining 30,000 would be covered by Jane’s policy, which has a per-person BI limit of 100,000, so paying 30,000 is well within Jane’s coverage.

Therefore, the amount collected from Jane’s policy is 30,000.