$7.$ Other types of insurance

In addition to medical, home, and auto$-$insurance policies, you can choose to purchase additional policies to protect against other types of losses. Consider Dmitri, a psychiatrist with a standard HO$-2$ policy with $$400,000$ of insurance on his home, an auto insurance policy with liability limits of $100/300/50,$ and a professional liability policy with a $$50,000$ limit$.$ His daughter recently took a course in personal finance and wants to make sure her father is adequately protected from potential losses. She knows her father has all the standard policies, so she reviews a number of situations that aren$$t always covered under standard policies. For each of the following scenarios, indicate the type of coverage$$one Dmitri already has or one he should purchase$$that would protect against the loss described.

How to Protect Against This Loss

A flood destroys the basement of the home, causing $$20,000$ in damage.

On Halloween, someone destroys the shed in his backyard and all of its contents, totaling $$1,800$ in damage.

His personal camera is stolen from inside his car.

In addition to these policies, he is considering an umbrella liability insurance policy with limits of $$1$ million. Which of the following statements regarding umbrella policies are true? Check all that apply.

If Dmitri is sued by a client and must pay $$55,000$ in damages, his umbrella policy will pay the $$5,000$ above the limits of his professional liability policy.

The cost of the additional umbrella policy is high and is only worth that cost if Dmitri is wealthy.

If Dmitri causes an automobile accident and the medical bills for the other driver and his or her passenger are $$110,000($$$80,000$ and $$30,000,$ respectively$),$ the umbrella policy will cover $$10,000$ of the cost.