Assume Jane and Jack, purchased their home in 1980 for $42,000. Since then, comparable homes in their neighborhood have most recently sold for $84,000. The cost to replace the home would be $75,000. The Jane and Jack have a $60,000 (Coverage A) Homeowners policy in force.

Answer the following questions as if each question were a separate event.

1) How much will Jane and Jack collect for a total covered fire loss under coverage A?

2) How much will be collected for a $20,000 partial loss under coverage A?

3) What would be your answers to question 2 above if the Jane and Jack had only $42,000 of insurance of Coverage A?