Based on the large-loss principle and your particular situation, a is most appropriate for your homeowners policy.

Given your current insurance coverage, in the event of a fire, your house and household belongings are over-insured by .

If you were to reduce the coverage on your home to its replacement value of $225,000, then your personal property coverage could also be reduced to . This is because the minimum personal coverage available on a HO-3 policy is of the home coverage.

In what area is the coverage on the home itself severely lacking?

Fire damage, which is not included in a standard homeowners policy.

Earthquake damage, which is not included in a standard homeowners policy.

Volcano damage, which is not included in a standard homeowners policy.

The deductible should be reduced.

In what area is the coverage of your personal property particularly inadequate?

Your policy can be improved by adding additional riders for both your ring and your computer system.

Your personal property coverage is not inadequate; your HO-3 policy fully protects both your diamond ring and your computer system.

You need a special rider on the computer system, since the standard maximum is $2,000 per occurrence.

You need a special rider to protect your diamond ring, since the standard maximum coverage is $1,000 per occurrence.

If your personal belongings are all reduced to ashes in a fire, what is the best way to document your loss?

Provide from your memory a list of your belongings and their worth.

Provide the report from the fire department.

Show pictures of the ashes from the fire and request the full amount of coverage.

Prepare and safeguard a visual (video or photographic) inventory that is kept in a safe deposit box.

In addition to coverage for your house and personal property, the standard HO-3 homeowners policy also covers: Check all that apply.

No-fault medical payments coverage up to $1,000 per occurrence.

No-fault property damage coverage up to $10,000 per occurrence.

Comprehensive personal liability coverage up to $300,000 per occurrence.

Loss of use and/or additional living expense coverage up to 20% of the value of your home.

If you have a small loss, why might you decide to not report it to your insurance? Because ... Check all that apply.

The amount of the loss is less than your deductible.

You dont have the necessary documentation to prove the loss.

Your insurance premium may increase for the next several years, which may, in the long run, cost you more than the amount of the loss.

Think about the liability coverage provided by your homeowner and automobile policies. If you ascribe to the large-loss principal, then you should:

Keep your coverage at the minimum levels that you currently carry.

Hire an insurance consultant to help identify ways to reduce your liability exposure.

Significantly increase your liability coverage beyond the minimum limits that you currently carry.

Plead with your agent to increase your coverage even though insurance companies dont provide additional coverage beyond the standard limit.

You are thinking about adopting a guard dog, believing that the dog will lower the risk of a theft, vandalism, or malicious mischief insurance claim. You should remember that:

You are not required to report the dog ownership to your insurance, but an agent or company representative may ask if you have a dog the next time you renew your coverage or initiate a new policy.

If you report the dog ownership, your insurer may immediately drop you.

Approximately one-third of homeowners insurance liability claims are associated with dog bites.

There is a special discount for dog owners.

If you were to total your car in an accident at which you are at fault, your insurance company is likely to pay to repair your car. This is because .

Assume your states minimum liability limits for an automobile policy are 25/50/10. Next assume that you cause an accident that involves multiple injuries to three people, each with medical expenses of $225,000. The maximum bodily injury payout that could be made on your behalf by your insurance company for this accident is .

Based on the large-loss principle, should you modify your existing automobile insurance coverage?

Yes, increasing both the amount of liability coverage carried and the comprehensive and collision coverages added to the policy.

No, dont change your existing policy.

Yes, but only increase the amount of liability coverage to the existing policy.

Yes, but only add comprehensive and collision coverages to the existing policy.