In the described scenario, the total coverage across Policy A and Policy B equals 150,000.

• A. True
• B. False
• C. Cannot be determined
• D. It depends on premiums

Answer: (A)

The amount of coverage is determined by the policy limits, not by what you pay in premiums. If the scenario clearly states that the combined limits of Policy A and Policy B total 150,000, then that statement is true. In other words, the total coverage available across both policies adds up to 150,000 as described. Premiums don’t set the coverage amount, though they do affect cost; the stated total is about the limits, not the price. If you ever needed to question it, you’d look at the actual limits of each policy and how they apply, but here the scenario already gives the total.