Personal Auto Policy



The goal of this project is to explore the topic of the Personal Auto Policy (PAP). The project requires you to work in Excel with the provided spreadsheet. Be sure to fill in the yellow boxes in the Excel file for full credit and show all work by referencing cells where necessary (do not simply type in answers). In addition, type up a report in Word (1-2 pages) with a separate section for the introduction (description of the project), findings (answer assignment questions, plots, etc.), and conclusion (conclusions, summary). Make sure to follow all directions or points will be deducted. This is an individual project so be sure to submit your own work. Upon completion, please submit both your Word report and Excel file to blackboard at the same time. Each question (A, B, C, D, E, F, G) in the Excel file is worth 13 points (total of 90 points) and the report is worth 9 points.



Personal Auto Policy

Assume that Zabine Telan owns a PAP similar to the one discussed in chapter 12 and reproduced in Appendix A on page 379. Zabine’s policy has the following limits:

Part A = $50,000 bodily injury each person; $100,000 bodily injury each accident; $50,000 property damage each accident

Part B = $5,000

Part C = $50,000 each person; $100,000 each accident

Part D = $1,000 deductible for collision; $500 deductible for other than collision

Assume that each of the events described in the following situations are distinct. The actual cash value of Zabine’s car is $23,000. The goal is to calculate the amount Zabine’s insurer will pay in total (i.e., net after any deductible that Zabine must pay).


  1. Distracted while driving, Zabine slammed into a van. The van was occupied by two people (driver and passenger). The van was traveling down the highway and the accident was Zabine’s fault. After a successful lawsuit, the van driver was awarded $50,000 in damages for personal injuries and $22,000 in property damage to the van. The van passenger was awarded $65,000 in damages for personal injuries. To defend Zabine in court, the lawyers charged $15,000.


  1. Mara, Zabine’s daughter, is learning to drive when she causes damage to their house and their parked second vehicle. Damage to an inside wall and the garage door are extensive. Damage to Zabine’s house is $65,000, the driven automobile is $6,000, and the second car is $4,000. The same insurance coverage covers both automobiles. It’s important to keep in mind that in the event of a collision involving two vehicles covered by the same insurance policy, only one deductible will be required.


  1. Zabine crashes into a parked automobile after she runs a stop sign, resulting in damage to both vehicles. Each vehicle had $6000 worth of damage.


  1. Zabine is struck by an uninsured vehicle while driving to the store. Zabine’s medical bills total $4,000 and lost wages total $15,000. Damage to Zabine’s vehicle amounts to $25,000.


  1. Zabine lends a car to Karmel. Karmel has a PAP, with coverage identical to Zabine’s. Karmel runs over and injures a famous soccer player who recently signed a 1-year contract for $1,000,000. Karmel is sued for $1,500,000.


  1. For a week, Zabine borrows a neighbor’s car, with permission, while the neighbor is away on vacation. The neighbor has a PAP similar to the one Zabine has. On the sixth day, Zabine hit a tree while driving. The neighbor’s automobile sustained $3,500 in damage.


  1. Zabine is driving on County Highway. All of a sudden, Zabine collides head-on with a deer. Zabine’s vehicle is destroyed.

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