Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $230,000 and insured it (via an HO-5 policy) for $200,000. The policy reimburses for actual cash value and has a $1,000 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a 4-year-old television set with a current replacement value of $1,500 and an estimated useful life of 6 years. They also took jewelry valued at $1,400 and silver flatware valued at $3,700. If the Browns’ policy has an 80% co-insurance clause, do they have enough insurance? Yes or No Assuming a 50% coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items. Do not round intermediate calculations. Round the answer to two decimal places. $ _____________________ What advice would you give the Brown family about their homeowner's coverage?
Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $230,000 and insured it (via an HO-5 policy) for $200,000. The policy reimburses for actual cash value and has a $1,000 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a 4-year-old television set with a current replacement value of $1,500 and an estimated useful life of 6 years. They also took jewelry valued at $1,400 and silver flatware valued at $3,700. If the Browns’ policy has an 80% co-insurance clause, do they have enough insurance? Yes or No Assuming a 50% coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items. Do not round intermediate calculations. Round the answer to two decimal places. $ _____________________ What advice would you give the Brown family about their homeowner's coverage?
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 61P
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Question
Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $230,000 and insured it (via an HO-5 policy) for $200,000. The policy reimburses for actual cash value and has a $1,000 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a 4-year-old television set with a current replacement value of $1,500 and an estimated useful life of 6 years. They also took jewelry valued at $1,400 and silver flatware valued at $3,700.
If the Browns’ policy has an 80% co-insurance clause, do they have enough insurance?
Yes or No
- Assuming a 50% coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items. Do not round intermediate calculations. Round the answer to two decimal places.
$ _____________________
- What advice would you give the Brown family about their homeowner's coverage?
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
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