financial literacy

Evaluating homeowner's policy coverage. Last year, Eleanor and Felix Knight 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 2-year-old television set with a current replacement value of $600 and an estimated useful life of 8 years. They also took jewelry valued at $1,850 and silver flatware valued at $3,000. 1. If the Knights' policy has an 80 percent co-insurance clause, do they have enough insurance? 2. Assuming a 50 percent coverage C limit, calculate how much the Knights would receive if they filed a claim for the stolen items. 3. What advice would you give the Knights about their homeowner's coverage? Personal automobile policy coverage. Finn Stone has a PAP with coverage of $25,000/$50,000 for bodily injury liability, $25,000 for property damage liability, $5,000 for medical payments, and a $500 deductible for collision insurance. How much will his insurance cover in each of the following situations? Will he have any out-of-pocket costs? 1. Finn loses control and skids on ice, running into a parked car and causing $3.785 damage to the unoccupied vehicle and $2,350 damage to his own car. 2. Finn runs a stop sign and causes a serious auto accident, badly injuring two people. The injured parties win lawsuits against him for $30,000each 3. Finn's 18 -year-old son borrows his car. He backs into a telephone pole and causes $1,450 damage to the car