Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

FIN 101 Homework #10 Please write (type) your answers to the questions here, then save and submit them as assignments for the corresponding assignment. 1)

image text in transcribedimage text in transcribed
FIN 101 Homework #10 Please write (type) your answers to the questions here, then save and submit them as assignments for the corresponding assignment. 1) Larry recently had a re at his home. The re caused about $20,000 of damage to the dwelling. The garage which was detached was valued at $15,000 was totally destroyed but did not have the car in it at the time of the re. Replacement of Larry's personal property damaged in the home and garage amounted to $16,500. In addition $500 in cash and a baseball card collection valued at $4,000 were destroyed. During the time the damages were being repaired, Larry stayed in a motel for one week and spent about $1,500 on food and lodging. The house had a value of $200,000 and was insured for $160,000 under an HO-3 policy with a $500 deductible. Use table 10-1 on page 3088 to answer the following questions: A) Assuming that the deductible was applied to the damage to the dwelling, calculate the amount covered by insurance and the amount Larry must pay for each loss listed: the dwelling: The insurance covered the dwelling (minimum 20,000) required to pay a 500 deductible the garage: Was covered by insurance the cash and baseball card collection- $1200 covered by insurance and the rest is covered by Larry and the extra living expenses (20% of home insurance) covered by insurance B) How much of the amount of personal property loss would be covered by the insurance policy? Paid for by Larry? The insurance policy covers 50-70% of insurance on the home for personal property loss. 50% would be 80,000. His cash and card collection would only have 1,200 covered. He would be responsible for 3,300 dollars. 2) Elsie recently ran off the road in her car and struck a tree. Elsie's vehicle suffered $10,000 in damages. The car has a book value of $25,000. Elsie carried collision insurance with a $500 deductible. How much will Elsie be reimbursed by her policy? She will be responsible for the $500 deductible. Jable 10-1 Summary of Homeowner's Insurance Policies HO-1 (Basic Form) HO-2 (Broad Form) HO-3 (Special Form) Perils covered Perils 1-4, 6, 8-12 Perils 1-16 All perils except those (descriptions are given below) specifically excluded for buildings; perils 1-16 on personal property (does not include glass breakage) House and any other Amount based on Amount based on Amount based on attached buildings replacement cost, replacement cost, replacement cost, minimum $15,000 minimum $15,000 minimum $20,000 Detached buildings 10 percent of insurance on 10 percent of insurance on 10 percent of insurance on (appurtenancestructures) the home (minimum) the home (minimum) the home (minimum) Trees, shrubs, plants, etc. 5 percent of insurance on 5 percent of insurance on 5 percent of insurance on the home, $500 maximum the home, $500 maximum the home, $500 maximum per item per item per item Personal property 50-70 percent of insurance on 50-70 percent of insurance on 50-70 percent of insurance on the home (minimum) the home (minimum) the home (minimum) Loss of use and/or additional 10 percent of insurance on 20 percent of insurance on 20 percent of insurance on living expense the home the home the home Credit card, forgery, $1,000 $1,000 $1,000 counterfeit money Liability coverage/limits Special limits of liability (for all policies Comprehensive personal $300,000 For the following classes of personal property, special limits liability apply on a per-occurrence basis (e.g., per fire or theft): No-fault medical payments $1,000 money, coins, bank notes, precious metals (gold, silver, etc.), No-fault property damage $500 $200; computers, $5,000; securities, deeds, stocks, bonds, tickets, stamps, $1,000; watercraft and trailers, including furnishings, equipment, and outboard motors, $1,000; trailers other than for watercraft, $1,000; jewelry, watches, furs, $1,000; silverware, goldware, etc., $2,500; guns, $2,000. List of perils covered 1. Theft 10. Riot or Civil Commotion 2. Fire or Lightning 11. Damage caused by Aircraft 3. Explosion 12. Vandalism or Malicious Mischief 4. Smoke 13. Damage due to weight of Ice, Snow, or Sleet 5. Freezing 14. Sudden & Accidental Tearing Apart, Cracking, Burning, or 6. Vehicles Bulging 7. Falling Objects 15. Sudden & Accidental Damage from Artificially Generated 8. Volcanic Eruption Electric Current 9. Windstorm or Hail 16. Accidental Discharge or Overflow of Water from Plumbing, Air conditioning etc

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Management Concise

Authors: Eugene F. Brigham, Joel F. Houston

11th Edition

0357517717, 9780357517710

Students also viewed these Finance questions

Question

What is the method of least squares?

Answered: 1 week ago