EVALUATING HOMEOWNER'S POLICY COVERAGE.

Question:

Last year, Wayne and Kelsey Gannon bought a home with a dwelling replacement value of $350,000 and insured it (via an HO-5 policy) for $310,000. 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 two-year-old television set with a current replacement value of $600 and an estimared useful life of eight years. They also took jewelry valued at $1,850 and silver flatware valued at $3,000.

A. If the Gannon's policy has an 80 percent co-insurance clause, do they have enough insurance?

B. Assumring a 50 percent coverage C limit, calculate how much the Gannon's would recieve if they filed a claim for the stolen items.

C. what advice would you give the Gannon's about their homeowner's coverage?