Alabama Insurance Adjuster Practice Exam

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Prepare for the Alabama Insurance Adjuster Test. Enhance your readiness with flashcards and multiple choice questions, complete with hints and explanations. Gear up for your exam!

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What amount will Kelly need to pay out of pocket if her liability coverage limits are 50/100/50?

$25,000
$50,000
$10,000
$0

The correct answer is: $25,000

To understand the amount that Kelly will need to pay out of pocket, it’s important to clarify what her liability coverage limits of 50/100/50 represent. These numbers indicate the maximum amounts her insurance will cover for bodily injury and property damage: - The first number (50) refers to the maximum amount her policy will pay for bodily injury per person, which is $50,000. - The second number (100) indicates the total bodily injury limit per accident, capped at $100,000. - The third number (50) denotes the maximum amount for property damage per accident, which is $50,000. If Kelly is involved in an accident and the total liability exceeds her coverage limits, she would be responsible for paying the difference. In this scenario, if for instance, the bodily injury claims for multiple victims totaled $100,000 and property damage costs amounted to $75,000, then Kelly would have to pay out of pocket for amounts exceeding her coverage, depending on the specifics of the claims against her. If we assume that the total damages claim (including both bodily injury and property damage) is $125,000 (an example scenario), the breakdown would be: - Her insurance would cover up to $100,