If Mr. Higgins' vehicle damage coverage is limited to $5,000, what is the payout amount for Sue Trent's total loss valued at $6,000?

When determining the payout amount for a total loss under Mr. Higgins' vehicle damage coverage, it's essential to understand the principle of policy limits in insurance. In this scenario, Mr. Higgins' coverage is capped at $5,000. This means that regardless of the actual value of the loss, which is $6,000 in Sue Trent's case, the insurance company will only compensate up to the limit specified in Mr. Higgins’ policy.

Since the coverage limit does not allow for a payout exceeding $5,000, this amount becomes the maximum amount payable to cover Sue Trent's total loss. Therefore, even though the total loss is valued higher, the payout is restricted to the policy limit. This aligns with common insurance principles where coverage amounts determine claim payouts. In this case, the correct payout amount is indeed $5,000, reflecting the limitations of Mr. Higgins' vehicle damage coverage.