Author Question: Kevin has three liability policies which provide for contribution by equal shares if other insurance ... (Read 55 times)

dbose · **on:** Jul 11, 2018

Kevin has three liability policies which provide for contribution by equal shares if other insurance applies to a loss.

How much will each policy pay for a 3,000,000 liability judgment if policy A provides 500,000 of coverage, policy B provides 1,000,000 of coverage, and policy C provides 3,000,000 of coverage?
A) Each policy will pay 500,000, and Kevin must pay the remaining 1,500,000.
B) Policy A will pay 500,000, policies B and C will each pay 1,000,000, and Kevin must pay the remaining 500,000.
C) Policy A will pay nothing, policy B will pay 1,000,000, and policy C will pay 2,000,000.
D) Policy A will pay 500,000, policy B will pay 1,000,000, and policy C will pay 1,500,000.

Question 2

Helen and John both own automobiles on which they carry liability insurance. If Helen is negligent and has an accident while driving John's car with his permission, how will each insurer respond to any liability judgment against Helen?

A) The insurers will pay the judgment on a pro rata basis.
B) John's insurer will pay on an excess basis if Helen's insurance is insufficient to cover the judgment.
C) Helen's insurance will pay on an excess basis if John's insurance is insufficient to cover the judgment.
D) The policies will pay the judgment on the basis of contribution by equal shares.