Miranda, age 19, is a college student at UTD. She purchased a car from her friend, Blake. It is the first car
she has owned. The car is a 2009 Honda Civic and it has 150,000 miles on it. According to the Blue Book,
the car has a market value of $2,000.
Miranda has some questions about what auto insurance she should purchase:
1.Describe the coverages available under a PAP.
2.Of the coverages described in (1), which ones should she purchase and which ones should she not
purchase, and why.
3.Of the coverages you have recommended Miranda purchase what, if any, coverage is available for the
following:
a.April, a friend of Miranda, borrows the car with Miranda’s permission and is at fault for causing an
accident in which April damages another car.
b.Miranda becomes inebriated at a party, drives her car, and is at fault for causing an accident in which
another motorist suffers an injury.
c.To earn some money, Miranda charges a fee to other UTD students to commute to and from campus.
While transporting several students, Miranda has an accident in which she is at fault.
Sample Solution
