1. Eric and Susan Fowler just purchased their first home, which cost $130,000. They purchased a homeowners...
Question:
1. Eric and Susan Fowler just purchased their first home, which cost $130,000. They purchased a homeowner’s policy to insure the home for $120,000 and personal property for $75,000. They declined any coverage for additional living expenses. The deductible for the policy is $500.
Soon after Eric and Susan moved into their new home, a strong windstorm caused damage to their roof. They reported the roof damage to be $17,000. While the roof was under repair, the couple had to live in a nearby hotel for three days. The hotel bill amounted to $320. Assuming the insurance company settles claims using the replacement value method, what amount will the insurance company pay for the damages to the roof?
Step by Step Answer:
Focus On Personal Finance
ISBN: 9781259919657
6th Edition
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart