assume that you have a Homeowners policy (HO-3) with the following limits. Assume the policy limits exceeds 80% of the replacement cost of the house. Ignore any deductibles. Coverage A-Dwelling: $100,000 Coverage B-Other structure: $ 10,000 Coverage C-Personal property: $ 50,000 Coverage D-loss of use: $ 30,000 Coverage E-Personal liability: $100,000 per occurrence Coverage F-Medical payments: $ 1,000 per person

1) Your furniture and appliances in your kitchen are damaged by a fire. It will cost $2,000 to replace the furniture and appliances (the actual cash value is $1200). Your homeowner policy will pay

A) $0 B) $1,200 C) $2,000 D) None of the above

2) Assume you are a self-employed accountant and work at home. One of your clients sues you for negligence in the preparation of a tax return and is awarded a $7000 judgment against you. Your homeowner policy will pay

A) $0 B) $7000 C)1000 D) None of the above

3) A fire damages your house, your personal property and your car. It costs $60,000 to repair the house (the actual cash value is $40,000), $60,000 to replace your personal property (the actual cash value is $30,000) and $2,000 to repair you car. Your homeowner policy will pay

A) $112,000 B) $70,000 C) $90,000 D) $92,000 E) None of the above