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: Cengage Learning
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Textbook Question
Chapter 10, Problem 2FPE
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 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 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.
- a. If the Browns’ policy has an 80 percent co-insurance clause, do they have enough insurance?
- b. Assuming a 50 percent coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items.
- c. What advice would you give the Brown family about their homeowner’s coverage?
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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.
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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?
Chapter 10 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Ch. 10 - Prob. 1LOCh. 10 - Identify the types of coverage provided by...Ch. 10 - Prob. 3LOCh. 10 - Prob. 4LOCh. 10 - Prob. 5LOCh. 10 - Choose a property and liability insurance agent...Ch. 10 - Prob. 1FPECh. 10 - Last year, Thea and Rory Brown bought a home with...Ch. 10 - Prob. 3FPECh. 10 - Prob. 4FPE
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