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An insured has 25/50/25 limits and injured another person. How much is paid by the insured's insurance company for a $30,000 tort claim and $7,500 attorney fees?
0, since the insured was at-fault
$50,000, the policy limit
$37,500, the actual damages and the attorney's fees for defense
$32,500, the policy limit and the attorney's fees for defense
The correct answer is: $32,500, the policy limit and the attorney's fees for defense
Option A is incorrect because even if the insured was at-fault, their insurance company would still cover the cost of damages up to their policy limit. Option B is incorrect because the policy limit only applies to bodily injury or property damage caused by the insured to a third party, not including attorney fees. Option C is incorrect because the insurance company will only pay up to the policy limit for damages, in this case $30,000, and the insured may be responsible for paying the remaining $7,500 in attorney fees out of pocket. Option D is the correct answer because the insured's policy limit of 25/50/25 means their insurance company will pay up to $25,000 for bodily injury or death to one person, $50,000 total for bodily injury or death to multiple people, and $25,000 for property damage, plus the $7,500