Last year, Paul and Joanna Stillman bought a home with a dwelling replacement value of $230,000 and insured it (via an HO-5 policy) for $202,000. The policy reimburses for actual cash value and has a $500 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a 2-year-old television set with a current replacement value of $1,300 and an estimated useful life of 10 years. They also took jewelry valued at $2,100 and silver flatware valued at $4,200.

 

a. If the Stillman' policy has an 80% co-insurance clause, do they have enough insurance?

b. Assuming a 50% coverage C limit, calculate how much the Stillmans would receive if they filed a claim for the stolen items. Round the answer to two decimal places.