Understanding Liability Coverage: How Limits Work in Accidents

If Molly's liability policy covers $50,000 for bodily injury per person, how much is available for multiple injured persons in one accident?

• A. $50,000
• B. $100,000
• C. $150,000
• D. $200,000

Answer: (B)

The correct amount available for multiple injured persons in one accident, given that Molly's liability policy covers $50,000 for bodily injury per person, is indeed $100,000. This figure arises from the typical structure of liability insurance policies, which generally include both a per-person limit and a per-accident limit. In this case, if the policy states that it covers $50,000 per person, this means that for any individual claimant resulting from an accident, the maximum payout is $50,000. However, most liability policies also have an aggregate limit for all claims arising from a single incident. When there are multiple injured persons, the total payout for one accident typically doubles the per-person limit, leading to a total of $100,000 being available across all claims resulting from that single accident. The other options do not accurately reflect the conventional payout structure associated with a liability policy that has a specified limit per individual. Thus, understanding this structure clarifies why $100,000 is the correct answer when considering multiple injured persons in one incident.

When it comes to liability insurance, knowing the details can save you a whole lot of confusion—especially when you're gearing up for the North Carolina Adjuster Exam. One of the common scenarios you'll stumble upon involves understanding how much coverage applies when multiple individuals are injured in one accident. So, let’s break it down, shall we?

Let’s imagine that Molly has a liability policy that covers $50,000 for bodily injuries per person. You might wonder, “How much total is available if multiple people are injured?” It’s a crucial question that ties into the foundational concepts of liability insurance—knowing this helps you ace those tricky exam questions!

The answer? A neat $100,000—an amount that derives from the structure commonly found in these types of insurance policies. Here’s the thing: while Molly’s policy offers $50,000 per individual, there's also a per-accident limit that comes into play. When multiple claimants are involved, this per-person limit is usually doubled. So, 50,000 for person A, and another 50,000 for person B leads us to a grand total of—you guessed it—$100,000 available for all claims arising from that single incident.

Now, why do those other options—$50,000, $150,000, and $200,000—miss the mark? Well, if you think about it, the $50,000 option would only cover a single person, which doesn't fit our situation of multiple injured parties. The $150,000 and $200,000 figures might seem plausible at first glance, but they simply don’t align with how liability policies structure their limits. The design of these limits provides clarity and fairness in payout situations.

Understanding these nuances is not just important for your exam; they’re vital in real-world scenarios too! When accidents happen, knowing the structure of liability policies can aid policyholders, adjusters, or anyone affected by such incidents.

To enhance your learning experience, consider this: when answering exam questions, take a moment to reflect on the structure of the insurance you're being asked about. It’s not just a matter of memorizing answers; it's about grasping how these policies function under the hood. By mastering these points, you’ll feel a lot more confident when that exam day rolls around, and you’ll navigate those questions with finesse.

So, next time you're studying or prepping for those exam questions, remember Molly's scenario. It’s a simple yet powerful example of how liability insurance can work in the real world. Grounding your studies in practical examples will not only help you answer questions correctly but also give you valuable insights when you're working in the field. Good luck!