Home and Automobile Insurance Newlyweds Jamie Lee and Ross have had several milestones in the past year. They are newlyweds, recently purchased their first home and now have twins on the way! Jamie Lee and Ross have to seriously consider their insurance needs. A family, a home and now babies on the way, they need to develop a risk management plan to help them should an unexpected event arise. Current Financial Situation: Assets (Jamie Lee and Ross combined): Checking account: $6,300 Savings Account: $23,200 Emergency Fund savings account: $30,500 IRA balance: $36,000 Car: $10,000 (Jamie Lee) and $18,000 (Ross) Liabilities (Jamie Lee and Ross combined): Student loan balance: $0 Credit Card Balance: $4,000 Car Loans: $8,000 Income: Jamie Lee: $50,000 gross income ($37,500 net income after taxes) Ross: $75,000 gross income ($64,000 net income after taxes) Monthly Expenses (combined): Mortgage: $1,252 Property Taxes and Insurance: $500 Utilities: $195 Food: $600 Gas/Maintenance: $375 Credit Card Payment: $250 Car Loan Payment: $389 Entertainment: $300 Original Purchase Price of Home: $293,000 Jamie and Ross decided to conduct a check-up on their homeowner’s insurance policy. They noticed that they had omitted covering Jamie Lee’s diamond wedding band set from their policy. What if it got lost or stolen? It was a major purchase and beside the emotional value, the cost to replace the diamond jewelry would be very high. What should they do?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter10: Protecting Your Property

Section: Chapter Questions

Problem 5FPE

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Home and Automobile Insurance

Newlyweds Jamie Lee and Ross have had several milestones in the past year. They are newlyweds, recently purchased their first home and now have twins on the way!

Jamie Lee and Ross have to seriously consider their insurance needs. A family, a home and now babies on the way, they need to develop a risk management plan to help them should an unexpected event arise.

Current Financial Situation:

Assets (Jamie Lee and Ross combined):

Checking account: $6,300

Savings Account: $23,200

Emergency Fund savings account: $30,500

IRA balance: $36,000

Car: $10,000 (Jamie Lee) and $18,000 (Ross)

Liabilities (Jamie Lee and Ross combined):

Student loan balance: $0

Credit Card Balance: $4,000

Car Loans: $8,000

Income:

Jamie Lee: $50,000 gross income ($37,500 net income after taxes)

Ross: $75,000 gross income ($64,000 net income after taxes)

Monthly Expenses (combined):

Mortgage: $1,252

Property Taxes and Insurance: $500

Utilities: $195

Food: $600

Gas/Maintenance: $375

Credit Card Payment: $250

Car Loan Payment: $389

Entertainment: $300

Original Purchase Price of Home: $293,000

Jamie and Ross decided to conduct a check-up on their homeowner’s insurance policy. They noticed that they had omitted covering Jamie Lee’s diamond wedding band set from their policy. What if it got lost or stolen? It was a major purchase and beside the emotional value, the cost to replace the diamond jewelry would be very high. What should they do?

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