Difficulty: Easy

Average Score: 75%

When increased liability limits are purchased on a personal auto policy, what amount of coverage is available for claims by an injured family member?

Rationale

Same as the amount provided for nonfamily members.

Increased liability limits on a personal auto policy extend the same coverage amount for claims made by injured family members as they do for non-family members. This ensures that family members are afforded the same level of protection as other individuals involved in an accident.

A (Double the amount provided for nonfamily members) YOUR ANSWER

This choice is incorrect because purchasing increased liability limits does not automatically double the coverage for family members. The coverage remains consistent with the limits established for non-family members, maintaining equity in the policy.

B (Half the amount provided for nonfamily members) YOUR ANSWER

This option is also incorrect since it suggests that family members receive less coverage than non-family members, which is not the case. The liability limits apply equally to all parties involved, regardless of their relationship to the policyholder.

C (None other than the State minimum limits) YOUR ANSWER

This choice is misleading because it implies that injured family members are only covered by the minimum state requirements. While state minimums provide a baseline, purchasing increased liability limits ensures that family members are covered up to the higher limits specified in the policy.

D (Same as the amount provided for nonfamily members) CORRECT

This choice accurately reflects the policy structure. When increased liability limits are purchased, the coverage available for injured family members matches exactly the amount provided for non-family members. This consistency ensures that all individuals involved in an accident are treated equitably under the policy.

Conclusion

Increased liability limits on a personal auto policy ensure that coverage for claims made by injured family members is equal to that provided for non-family members. This design promotes fairness and comprehensive protection in the event of an accident, preventing disparities in coverage based on personal relationships. Understanding this aspect is crucial for policyholders to ensure adequate protection for all potential claimants.

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