1. Alex has owned his home for ten years. When he purchased it for $178,000, Alex bought a $160,000 homeowner's insurance policy with a $500 deductible. He still owns that policy, even though the replacement cost of the home is now $300,000, and the policy required coverage of 80 percent of the replacement cost.

1. How much insurance on the home should Alex carry now to be fully insured? (5 pts)

1. If Alex suffered a $20,000 fire loss to the home, how much would he be reimbursed for by the insurance company? (10 pts)