Kyle, the Unlisted Driver, and a 30/60/25 Policy

Two caps operate simultaneously: $30,000 per person and $60,000 per accident.

1. Apply the per-person cap first: A is capped at $30,000 (claim $40,000), B at $30,000 (claim $35,000), C at $18,000. Capped total = $78,000.
2. The per-accident cap is $60,000, so $18,000 of legitimate claims cannot be paid under the policy.
3. A defensible, good-faith allocation is pro rata on the capped amounts:

• A: $60,000 × (30/78) = $23,077
• B: $60,000 × (30/78) = $23,077
• C: $60,000 × (18/78) = $13,846

Why not pay A in full? Paying one claimant $30,000 and exhausting the per-accident limit exposes the carrier to bad-faith and unfair-settlement claims from B and C, who are equally entitled. Any distribution that respects both caps and is done in good faith with releases is acceptable; pro rata is the safest because it treats the claimants alike.

Do not forget the insured's own exposure. Kyle (and his father, as a permissive-user household member's parent/owner) remains personally liable for the shortfall: A $16,923, B $11,923, C $4,154. Advise the family in writing that the policy does not end the matter, which may prompt them to tender to their own umbrella or defense counsel.

Coverage (not a denial): under the PAP definition of "insured," a family member residing in the household is an insured for the covered auto. Kyle lives at home, drives a vehicle his parents own and insure, and there is no named-driver exclusion endorsement. Not being listed is an underwriting and rating failure, not a coverage condition. Denying would be a bad-faith position.

What the carrier can do:

• Re-rate the policy prospectively or issue a notice of nonrenewal consistent with Texas rules.
• Underwrite the household going forward, including a named-driver exclusion signed by the named insured if the family prefers to exclude him.
• Refer the agent's failure to disclose the household driver to agency review - the agent took the application but is not the coverage decision-maker.

Property damage: the limit is $25,000 against $31,000 in damage - $25,000 payable, $6,000 uninsured. The $25,000 comes out of the property damage limit, which is separate from the $60,000 bodily injury limit, so it does not reduce the bodily injury pool. Kyle is personally exposed for the $6,000.

Also confirm the pickup's own damage and the girlfriend's claim do not nibble at the liability limits - PIP is first-party and sits outside them.

Girlfriend (a guest, not a household member):

• PIP pays her $2,500 as a passenger in the covered auto, regardless of fault, without any liability determination, and without reducing the $60,000 available to the sedan's occupants.
• She also has a liability claim against Kyle for the remaining $9,500, which competes in the same $60,000 per-accident pool. Prudent handling is to bring her into the same global allocation and get a release; paying her early outside the allocation invites a bad-faith complaint from A, B, and C.
• The PIP carrier may have a reimbursement right from any third-party recovery; note it in the file before releasing.

If the passenger were Kyle's resident brother, the answer splits:

• PIP still pays $2,500. He is an insured occupant; PIP is not fault-based.
• Liability coverage does not respond to his claim. The PAP excludes bodily injury to you or to an insured under the family-member definition. A resident brother is an insured, so his liability claim is excluded, even though he can still collect PIP.

That distinction - insured for PIP, excluded for liability - is exactly the judgment call adjusters get wrong. Confirm household status and relationship before allocating a dollar.