Assume that Bill Blanton owns a HO-3 policy for his home.

The limits set in his policy are provided below:

Type Limit

Coverage A $120,000

Coverage B $12,000

Coverage C $60,000

Coverage D $24,000

Coverage E $100,000

Coverage F $5,000

A $250 deductible applies to Section 1, Coverages A, B, and/or C. The replacement cost of Bills home is $130,000, the contents are valued at $70,000, and the home is 30 percent depreciated. Compute the amount that Bill will collect in each of the following circumstances and assume that each event occurs separately. Note: a deductible will only apply if losses are less than the coverage limit.

A) Bills house and all its contents are destroyed by a tornado. It takes six months to rebuild the home, and Bills additional living expenses amount to $10,000.

B) A neighbors eight-year-old child accidentally releases the brakes on his familys pickup truck, sending it crashing into Bills home. Damage to the home amounts to $25,000. The truck is destroyed. Its ACV before the loss was $22,000. The child and Bill both suffer a broken arm. Medical expenses amount to $5,000 for each person.

C) Bills unattached tool shed burns, destroying the shed (damage = $6,000) and the lawn-care equipment inside (damage = $4,000).

D) Bill negligently starts a fire while cooking. His home, all the contents, and tool shed (value of $15,000) are a total loss. It costs Bill an additional $30,000 to live in a rental home while his house is being rebuilt.

E) While burning leaves at his house, Bill causes his neighbors house to burn (damage = $120,000).

F) While playing golf at his house, Bills ball hits another golfer in the head. Bill yelled a warning before the victim, Bob, was hit. Bob claims not to have heard the warning and sues Bill for $5,000 in medical expenses, $10,000 in lost wages (because he couldnt perform his work for three months), and $70,000 for pain and suffering. Assume that Bob wins the case, and it costs an additional $20,000 to provide Bill with a legal defense.

G) While Jack (bills son) is away at college, his stereo is stolen from his dorm room (damage = $1,000).

H) While carrying his television to the basement, Bill drops it. It is a total loss (damage = $2,500).

I) Bill is a certified public accountant working from his office at home. He is sued for negligence in preparing Als income tax. The suit is successful, and Al wins a $20,000 judgment.