88. Sally has a personal automobile policy with a $300,000 underinsured motorist limit. She is struck by an at-fault driver with a $100,000 automobile liability limit. Sally's Bodily Injury Damages are determined to be $250,000. How much will Sally's Underinsured Motorist Insurance cover?
Answer: C
Sally's Underinsured Motorist Insurance will cover $150,000.
Sally's Underinsured Motorist Insurance will cover a total of $150,000. This amount is calculated by taking the difference between her bodily injury damages and the at-fault driver's liability limit.
A) $50,000
This option is incorrect. The calculation does not yield a coverage amount of $50,000, as this does not accurately reflect the difference between Sally's damages and the at-fault driver's liability limit.
B) $100,000
This option is also incorrect. While it may seem reasonable, the coverage does not equal $100,000 since it does not account for the full extent of Sally's damages, which exceed the at-fault driver's liability limit.
C) $150,000
This option is correct. Sally's total bodily injury damages amount to $250,000, and the at-fault driver's liability limit is $100,000. The Underinsured Motorist Insurance will cover the difference, which is $250,000 - $100,000 = $150,000.
D) $250,000
This option is incorrect. Although Sally's total bodily injury damages are $250,000, she cannot claim the entire amount from her Underinsured Motorist Insurance because the at-fault driver's liability reduces the coverage she can receive.
Conclusion
Sally's Underinsured Motorist Insurance covers $150,000 as it calculates the difference between her total bodily injury damages and the at-fault driver's liability limit. All other options fail to reflect the correct calculation based on the given limits and damages. Therefore, option C is definitively the right choice.