Ch 10: Assignment - Managing Property and Liability Risk 7. Other types of insurance In addition to medical, home, and auto-insurance policies, you can choose to purchase additional policies to protect against other types of losses. Consider Albert, a lawyer with a standard HO-2 policy with $400,000 of insurance on his home, an auto insurance policy with liability limits of 100/300/50, and a professional liability policy with a $100,000 limit. His daughter recently took a course in personal finance and wants to make sure her father is adequately protected from potential losses. She knows her father has all the standard policies, so she reviews a number of situations that aren't always covered under standard policies. For each of the following scenarios, indicate the type of coverage-one Albert already has or one he should purchase-that would protect against the loss described. How to Protect Against This Loss A flood destroys the basement of the home, causing $20,000 in damage. The cell phone he uses for work matters is stolen when he accidentally leaves it at a restaurant. He fails to extinguish his campfire before leaving the site; the fire gets out of control and causes $56,000 of damage (both to people and property) in the neighboring campsite. In addition to these policies, he is considering an umbrella liability insurance policy with limits of $1 million. Which of the following statements regarding umbrella policies are true? Check all that apply. If Albert's mother-in-law trips on a broken step on his porch and suffers injuries that require $120,000 in medical care, his umbrella policy will cover the difference between the total cost and what the HO-2 covers. The cost of the additional umbrella policy is high and is only worth that cost if Albert is wealthy. If Albert is sued by a client and must pay $60,000 in damages, this amount will come directly out of his umbrella policy. Ch 10: Assignment - Managing Property and Liability Risk 7. Other types of insurance In addition to medical, home, and auto-insurance policies, you can choose to purchase additional policies to protect against other types of losses. Consider Albert, a lawyer with a standard HO-2 policy with $400,000 of insurance on his home, an auto insurance policy with liability limits of 100/300/50, and a professional liability policy with a $100,000 limit. His daughter recently took a course in personal finance and wants to make sure her father is adequately protected from potential losses. She knows her father has all the standard policies, so she reviews a number of situations that aren't always covered under standard policies. For each of the following scenarios, indicate the type of coverage-one Albert already has or one he should purchase-that would protect against the loss described. How to Protect Against This Loss A flood destroys the basement of the home, causing $20,000 in damage. The cell phone he uses for work matters is stolen when he accidentally leaves it at a restaurant. He fails to extinguish his campfire before leaving the site; the fire gets out of control and causes $56,000 of damage (both to people and property) in the neighboring campsite. In addition to these policies, he is considering an umbrella liability insurance policy with limits of $1 million. Which of the following statements regarding umbrella policies are true? Check all that apply. If Albert's mother-in-law trips on a broken step on his porch and suffers injuries that require $120,000 in medical care, his umbrella policy will cover the difference between the total cost and what the HO-2 covers. The cost of the additional umbrella policy is high and is only worth that cost if Albert is wealthy. If Albert is sued by a client and must pay $60,000 in damages, this amount will come directly out of his umbrella policy