1. Apply What You've Learned - Managing Property and LiabilityRisk Scenario: You own a home with a market value of $275,000. Of this amount, $85,000 is apportioned to the land and $190,000 is apportioned to the house. It is estimated that the house would cost $225,000 to rebuild. The personal property in your home is worth $95,000, including a $3,000 diamond ring and a $4,000 computer system. You also own a car worth $35,000. You live in a state where there is a high risk for earthquakes. You have $150,000 in savings and investments that could be drawn on in case of emergency. You currently have a standard homeowner's policy with a $500 deductible, which insures your house for $275,000 and your personal belongings for $135,000, and you carry the minimum requirements of your state for car insurance. You have been advised to adjust your insurance coverage based on the large-loss principle. Given your current insurance coverage, in the event of a fire, your house and household belongings are over-insured by If you were to reduce the coverage on your home to its replaceme reduced to . This is because the minimum personal In what area is the coverage on the home itself severely lacking? Fire damage, which is not included in a standard homeowner's policy. According to the large-loss principal, you should: Transfer all risks possible to insurance. Insure your property for the maximum amount available. Insure only those risks that you cannot afford to cover using your own financial resources. Insure your property for minimum amounts only. . This is because the minimum personal In what are In what area is the coverage on the home itself severely lacking? Based on the large-loss principle and your particular situation, a is most appropriate for your homeowner's policy. If you were to reduce the coverage on your home to its replacement value of $225,000, then your personal property coverage could also be Fire damage, which is not included in a standard homeowner's policy. Volcano damage, which is not included in a standard homeowner's policy. Earthquake damage, which is not included in a standard homeowner's policy. The deductible should be reduced. In what area is the coverage of your personal property particularly inadequate? 1. Apply What You've Learned - Managing Property and LiabilityRisk Scenario: You own a home with a market value of $275,000. Of this amount, $85,000 is apportioned to the land and $190,000 is apportioned to the house. It is estimated that the house would cost $225,000 to rebuild. The personal property in your home is worth $95,000, including a $3,000 diamond ring and a $4,000 computer system. You also own a car worth $35,000. You live in a state where there is a high risk for earthquakes. You have $150,000 in savings and investments that could be drawn on in case of emergency. You currently have a standard homeowner's policy with a $500 deductible, which insures your house for $275,000 and your personal belongings for $135,000, and you carry the minimum requirements of your state for car insurance. You have been advised to adjust your insurance coverage based on the large-loss principle. Given your current insurance coverage, in the event of a fire, your house and household belongings are over-insured by If you were to reduce the coverage on your home to its replaceme reduced to . This is because the minimum personal In what area is the coverage on the home itself severely lacking? Fire damage, which is not included in a standard homeowner's policy. According to the large-loss principal, you should: Transfer all risks possible to insurance. Insure your property for the maximum amount available. Insure only those risks that you cannot afford to cover using your own financial resources. Insure your property for minimum amounts only. . This is because the minimum personal In what are In what area is the coverage on the home itself severely lacking? Based on the large-loss principle and your particular situation, a is most appropriate for your homeowner's policy. If you were to reduce the coverage on your home to its replacement value of $225,000, then your personal property coverage could also be Fire damage, which is not included in a standard homeowner's policy. Volcano damage, which is not included in a standard homeowner's policy. Earthquake damage, which is not included in a standard homeowner's policy. The deductible should be reduced. In what area is the coverage of your personal property particularly inadequate