5. Types of homeowner's insurance policies

Insuring a Standard Home

Sharon is the owner of a 15-year-old home, and is looking to buy a homeowners insurance policy. She feels it would be overly cautious to purchase protection from all perils, but in addition to protection from fire, vandalism, windstorms, and so on, she also wants insurance for damage caused by malfunctioning of internal structures like air conditioning or plumbing. Based on the peril coverage it offers, she purchases anHO-3 insurance policy.

Her home has a replacement value of $200,000, therefore she insures her home for the minimum legal requirement of ________.

. Assuming she does not purchase any additional coverage beyond the legal minimums, complete the following table indicating the maximum dollar value of reimbursement she can receive for each of the following:

Damage to personal property:____
Medical payments to others:_____
Loss of Use (Additional living expenses):_______
Comprehensive personal liability:_______

Insuring While Away at College

Sharons son, Paolo, is a college student living in an off-campus apartment where he resides year round. He owns an expensive computer and wants to make sure the full value is insured. Which of the following statements regarding Paolos insurance needs are true? Check all that apply.

( ) Paolo should purchase an HO-2 broad form insurance policy because he is not covered under his parents policy.

( )His computer is covered under his parents policy

( )If he purchases an HO-4 policy, he can choose the value of the property he wishes to insure

Insuring a Condominium

Sharons parents own a condominium that they fully insured for the replacement value of $120,000. Last year a portion of their roof collapsed due to the weight of snow after a severe storm, rendering the condo uninhabitable for the month that it took to complete repairs. Based on the coverage details of their condominium form (HO-1, HO-2, HO-3, HO-4, HO-6, HO-8) insurance policy, the additional living expenses they incur as a result of the damage (such as the cost of staying in a hotel during the repairs (will not be reimbursed/were not eligible for/ will be reimbursed up to 40% of personal property insurance/will be reimbursed up to 20% of personal property insurance).