Jonathan bought a house for $450,000 three years ago; at the time, he purchased a $400,000 homeowner's insurance policy. Hekept the same policy since then, even though the replacement cost of the home is now $675,000. If Jonathan suffers a $85,000 lossto the home, what percentage of the loss would be covered by this policy?O 81.39%64.91%86.65%56.17%O 74.07%

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Answered: Jonathan bought a house for $450,000…

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter10: Managing Property And Liability Risk

Section: Chapter Questions

Problem 2DTM

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Please help me understand this question?Kevin recently purchased a board form HO-2 policy with no deductible. The policy value is $174,000. A year later, his roof is damaged by vandalism and he suffers a loss of $139,200. If the replacement value of Kevin’s house is $290,000 and the insurance policy includes a replacement cost requirement of 80%, he will receive a reimbursement
LO.2 Alfred owned a term life insurance policy at the time he was diagnosed with a terminal illness. After paying $18,300 in premiums, he sold the policy to a company that is authorized by the state of South Carolina to purchase such policies. The company paid Alfred $125,000. When Alfred died 18 months later, the company collected the face amount of the policy, $150,000. As a result of the sale of the policy, how much is Alfred required to include in his gross income?
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