hapter 10 Financial Planning Exercise 2 Evaluating homeowners policy coverage

Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $210,000 and insured it (via an HO-5 policy) for $176,000. 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 3-year-old television set with a current replacement value of $400 and an estimated useful life of 6 years. They also took jewelry valued at $2,600 and silver flatware valued at $3,200.

If the Browns policy has an 80% co-insurance clause, do they have enough insurance?

-Select-

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?

Continue without saving