Andrea purchased an auto insurance policy with bodily injury liability

Andrea purchased an auto insurance policy with bodily injury liability limits of 250/500 ($250,000/$500,000). She also purchased a personal umbrella policy with a $1 million limit and a $500 self-insured retention.

Andrea was talking on her cell phone while driving, and her car struck and killed a pedestrian in a crosswalk. The court ordered her to pay $750,000 to the spouse of the person she killed. How will this claim be settled?
A) The umbrella policy will pay $749,500.
B) Each policy will pay $375,000.
C) $250,000 will be paid under the auto policy and $500,000 will be paid by the umbrella policy.
D) The auto policy will pay $250,000, Andrea will pay $500, and the umbrella policy will pay $499,500.

ANSWER

Answer: C