PAP problem

PAP problem

by Grisel Padron -
Number of replies: 7

Joe who is at fault, injures Sue in accident. Joe has 100/300/50 limits and Sue has $300,000 UM coverage. Sue incurs $350,000 in injuries. Ignoring PIP, how much will her UM cover?

The answer is $250,000. How is this calculated?

I would think his $300,000 for accident total for all BI would cover first, then her UM would pick up the remaining $50,000.

Someone please explain?? Jan, please enlighten me because I didn't pick it up even after re-reading the material.

In reply to Grisel Padron

Re: PAP problem

by Jan Bradburn- -
Joe's liability limits are 100/300/50. This means that $100,000 is available per person per occurrence and $300,000 is available for all BI claims per occurrence. Jan
In reply to Jan Bradburn-

Re: PAP problem

by Grisel Padron -

Hi Jan. Yes, I understand the limits but why didn't they use up the $300K all BI figure to cover the $350K injuries and then Sue's UM would have covered the remaining $50K? Is it so that not all of the liability is exhausted in one event?

When would the $300K be used?

In reply to Grisel Padron

Re: PAP problem

by Deleted user -

Let me chime in here and see if I score one!!

The $300K will be used up if Joe injured 3 people($100K x 3). The first limit is the MAX per person per accident. As there is only one person injured...it only covers $100K.

In reply to Deleted user

Re: PAP problem

by Grisel Padron -

Hi Allende,

You know that after I posted my reply to Jan, I thought that this would be the case. Which would mean if there had been 4 injured at $100K, then the all BI would be used. Otherwise, it's the per person limit that is used. In this case, it was Joe's Liability that was primary and her UM was excess. I think you're right on and if so, it makes sense.Thanks!

In reply to Deleted user

Re: PAP problem

by Jan Bradburn- -
Allende, You are correct with your answer, but another way to explain it would be: Four people are injured in a not-at-fault accident. The first person has $150,000 in medical bills and $100,000 is payable The second person has $60,000 in medical bills and $60,000 is payable The third person has $80,000 in medical bills and $80,000 is payable The fourth person has $80,000 in medical bills and $60,000 is payable because that is all that is left in the aggregate limit. Jan
In reply to Grisel Padron

Re: PAP problem

by Jan Bradburn- -
The $300,000 is the aggregate limit for all BI claims. There is only $100,000 available per person for all BI losses. The key is the per person limit. In split liability limits, the first amount is the maximum payable for each person injured. Jan