EBK PFIN
6th Edition
ISBN: 8220103648844
Author: Billingsley
Publisher: CENGAGE L
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Question
Chapter 10, Problem 2FPE
a)
Summary Introduction
To discuss: Whether person X have enough insurance when person E’s policy has 80% of co-insurance.
b)
Summary Introduction
To compute: The amount received by person E when the coverage C limit is 50%.
c)
Summary Introduction
To discuss: The advices given by person X regarding the coverage of home owners.
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Last year, Jose and Josefina Munoz bought a home with a dwelling replacement value of $250,000 and insured it (via an HO-5 policy) for $225,000. The policy reimburses actual cash value and has a $500 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a new computer with a current replacement value of $1,500 and an estimated useful life of three years. They also took jewelry valued at $2,500 and a coin collection valued at $1,500.
If the Munozs’ policy has a 90 percent co-insurance clause, do they have enough insurance?
Assuming a 50 percent coverage C limit, calculate how much the Munoz family would receive if they filed a claim for the stolen items.
What advice would you give the Munoz family about their homeowner’s coverage?
Last year, Eleanor and Felix Knight bought a home with a dwelling replacement value of $260,000 and insured it (via an HO-5 policy) for $221,000. The policy reimburses for actual cash value and has a $500 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a 3-year-old television set with a current replacement value of $500 and an estimated useful life of 9 years. They also took jewelry valued at $1,550 and silver flatware valued at $3,300.
If the Knights' policy has an 80% co-insurance clause, do they have enough insurance?
Assuming a 50% coverage C limit, calculate how much the Knights would receive if they filed a claim for the stolen items. Do not round intermediate calculations. Round the answer to the nearest cent.
What advice would you give the Knights about their homeowner's coverage?
Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $350,000 and insured it (via an HO-5 policy) for $310,000. The policy reimburses actual cash value and has a $500 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a two-year-old television set with a current replacement value of $600 and an estimated useful life of eight years. They also took jewelry valued at $1,850 and silver flatware valued at $3,000. Make sure to account for depreciation.
If the Browns’ policy has an 80 percent co-insurance clause, do they have enough insurance?
Assuming a 50 percent coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items.
What advice would you give the Brown family about their homeowner’s coverage?
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