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11. Other types of insurance Aa Aa Jack is a doctor with a standard HO-2 policy with $400,000 worth of insurance on his home, an auto insurance policy with liability limits of 100/300/50, and an additional professional liability policy that protects him aganst negligence and mistakes made only in his professional activities with a $500,000 limit. His daughter recently took a course in personal finance and wants to make sure her father is adequately protected from potential losses. Although she knows her father has all the standard policies, she describes a number of situations that aren't always covered under standard policies. For each of the scenarios that follow, indicate eithe 1) which of Jack's current coverages already protect him or (2) the correct type of coverage that would protect him against the loss described Buy comprehensive personal liability Buy earthquake insurance Already covered under professional liability Already covered under HO-2 How to Protect Against This Loss? An earthquake destroys the deck of the home, causing $20,000 worth of damage Buy comprehensive personal liability Already covered under HO-2 Buy a personal property floater Floater policy His camera is stolen from inside his car On Halloween, vandals destroy the shed in his backyar and all of its contents; the damages total $5,800 Already covered under professional liability Buy a personal property floater Already covered under HO-2 Buy comprehensive personal liability In addition to these policies, he is considering an umbrella liability insurance policy with a limit of $1 million. Which of the following statements regarding umbrella policies is true? If Jack causes an automobile accident and the total of other driver's medical bills and the other driver's passenger's bills is $110,000 ($80,000 for the driver and $30,000 for the driver's passenger), the umbrella policy will be used to pay for $10,000 will pay the $10,000 not covered by his auto insurance wealthy O If Jack causes an automobile accident and the other driver's medical bills total $110,000, his umbrella policy O The cost of the additional umbrella policy is extremely high; therefore, it is worth it only if Jack is extremely 7. Reimbursement on property damage Aa Aa Hubert's Replacement Cost Coverage Hubert recently purchased a $90,000 broad form HO-2 policy with no deductible. A year later, his roof is damaged by a windstorm and he suffers a loss of 72,000. If the replacement value of Hubert's house is $150,000 and the insurance policy includes a replacement cost requirement of 80%, he will receive a reimbursement of $
