Question
Chapter 10 Financial Planning Exercise 2 Evaluating homeowners policy coverage Last year, Thea and Rory Brown bought a home with a dwelling replacement value of
Chapter 10 Financial Planning Exercise 2 Evaluating homeowners policy coverage
Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $150,000 and insured it (via an HO-5 policy) for $125,000. 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 $1,100 and an estimated useful life of 7 years. They also took jewelry valued at $1,400 and silver flatware valued at $3,200.
- If the Browns policy has an 80% co-insurance clause, do they have enough insurance? -Select-YesNoItem 1
- Assuming a 50% coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items. Do not round intermediate calculations. Round the answer to two decimal places. $
- What advice would you give the Brown family about their homeowner's coverage?
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