What is the false statement concerning AAIA Liability limits?

The situation concerning the AAIA (Automobile Accident Insurance Act) Liability limits includes several important considerations regarding how liability coverage operates.

The statement that the limit applies per person injured is indeed a false statement because the coverage does not typically provide a separate limit for each individual injured in an accident. Instead, liability limits are often structured as an aggregate limit that applies to all claims arising from a single accident. This means that the total amount available for all injuries sustained in an accident will not exceed the specified limit, which is a key aspect of how insurance liability limits function.

The coverage being limited to $200,000 is a standard provision within many insurance policies and typically reflects a common maximum limit for liability coverage, making this a true statement. Similarly, the priority of payments often designates how the available funds will be allocated among different claimants, and it likely indicates that a portion, such as $190,000, is indeed reserved for bodily injury claims, which reinforces that this statement is true as it aligns with standard practices. Furthermore, the cost of defending a lawsuit counting against the limit is also a common aspect of liability coverage, meaning that legal costs and expenses are deducted from the overall limit available, which makes this statement accurate as well.

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