In a homeowners policy with a $300,000 liability limit, two named insureds are sued separately for negligence in the same incident. What is the maximum amount the insurer will pay for the claim, ignoring defense costs?

• A. $100,000
• B. $200,000
• C. $300,000
• D. $600,000

Answer: (C)

The main idea is that homeowners liability protection uses a per-occurrence limit. When multiple insureds are involved in the same event, it counts as one occurrence, not multiple. The insurer will pay up to the per-occurrence limit for all damages arising from that single incident, regardless of how many insureds are named or how many lawsuits are filed about that incident. Since the policy has a $300,000 limit per occurrence, the maximum amount the insurer will pay for this incident is $300,000.