3. Owen has his home and its contents insured under a Homeowners 3 (special form) policy. He carries $160,000 of insurance on the home, which has a replacement cost of $200,000. Explain the extent to which each of the following losses is covered. (Ignore the deductible). If Owens policy does not cover the loss or inadequately covers any of these losses, show how full coverage can be obtained.

a. Owens stamp collection, which is valued at $5,000, is stolen from his home.