Calvin and Danielle Perkins, ages 30 and 28, were recently married in Kansas City. Calvin is an electrical engineer with Analytical Solutions, a computer component design firm. Danielle has a masters degree in education and teaches at a local middle school. After living in an apartment for six months, the Perkins have negotiated the purchase of a new home in a rapidly growing Kansas City suburb. Kansas City Savings and Loan Association has approved their loan request for $270,000, which represents 90 percent of the $300,000 purchase price. Before closing the loan, the Perkins must obtain homeowners insurance for the home. The Perkins currently have an HO-4 renters insurance policy, which they purchased from Calvins bridge partner, Gene Patterson, who is an agent with the Roberts Insurance Company. To learn about the types of available homeowners insurance, Calvin has discussed their situation with Gene, who has offered them several homeowners policies for their consideration. He has recommended that the Perkins purchase an HO-5 policy because it would provide them with comprehensive coverage.

1. What forms of homeowners insurance are available? Which forms should the Perkins consider?
2. What are the perils against which the home and its contents should be insured?
3. Discuss the types of loss protection provided by the homeowners policies under consideration.
4. What advice would you give the Perkins regarding Genes suggestion? What coverage should they buy?