Question
Assume that Sandra Rice owns a HO-3 policy for his home. The limits set in his policy are provided below: Type Coverage A Coverage B
Assume that Sandra Rice owns a HO-3 policy for his home. The limits set in his policy are provided below:
| Type | Coverage A | Coverage B | Coverage C | Coverage D | Coverage E | Coverage F |
| Limit | $120,000 | $12,000 | $60,000 | $24,000 | $100,000 | $5,000 |
A $350 deductible applies to Section 1, Coverages A, B, and/or C. The replacement cost of Sandras home is $130,000, the contents are valued at $70,000, and the home is 30 percent depreciated. Compute the amount that Sandra will collect in each of the following circumstances and assume that each event occurs independently. Note: a deductible will only apply if losses are less than the coverage limit.
1) A storm ripped through Sandra's neighborhood, destroying her house and all of her belongings. Rebuilding the house will take six months, and Sandra will have to pay an additional $15,000 in living expenses during that time.
| Coverage A | $120,000 |
| Coverage B | $12,000 |
| Coverage C | $60,000 |
| Coverage D | $24,000 |
| Coverage E | $100,000 |
| Coverage F | $5,000 |
| Home replacement value | |
| Insurance to value ratio | |
| Dwelling limit | |
| Dwelling loss | |
| Personal property limit | |
| Personal property loss | |
| Loss of use limit | |
| Loss of use expense | |
| Deductible | |
| Does deductible apply (yes/no) | |
| Total collected |
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Principles Of Financial Accounting
Authors: Jerry J. Weygandt, Lorena Mitrione, Michaela Rankin, Keryn Chalmers, Paul D. Kimmel
3rd Edition
0730302296, 978-0730302292
