HO-2 AND PAP

Mr. Tibbs owns the Homeowners (HO-2) and the Personal Auto Policy found in your texts

appendices. The following limits apply.

HOMEOWNERS LIMITS: PERSONAL AUTO POLICY LIMITS:

A = $65,000 A = $100,000/$300,000/$50,000

B = $6,500 B = $1,000

C = $32,500 C = $100,000/$300,000

D = $13,000 D = ACV $250 Ded. Collision

E = $300,000 ACV $500 Ded. Other Than Collision

F = $500

$500 flat deductible Section I

Replacement cost of the dwelling is $72,000. One vehicle listed on policy

Replacement cost of the other structure is

$10,000 If a loss occurs to real or personal

property, 1/3 depreciation applies, therefore,

ACV = 2/3 replacement cost.

determine if the following situations are covered by the above policies. If there is coverage how much should be paid? The two policies above are the only ones in existence. No other contracts are to be considered. Each event is a separate occurrence.

1. Mr. Tibbs rents out a room to two students. One of the students falls down the stairs. Hospital costs equal $10,000. In addition, tuition costing $2,500 was lost due to the inability to complete the semester. The student sued Mr. Tibbs for $12,500.

2. Mr. Tibbs wakes up one morning and discovers a large tree leaning on the house due to a windstorm. Mr. Tibbs knew that the tree was dead and should have removed it two years ago. The cost to repair the dwelling is $10,000; to remove the tree $750; and the cost to plant a new tree $300.

3. The insured is found to be legally obligated to pay $170,000 because of bodily injury to a neighbor (a fishing partner) caused by an accident involving Mr. Tibbss 24.9 horsepower outboard motor boat.

4. A 35 horsepower outboard motor boat was rented to Mr. Tibbs. The owner of the boat sues Mr. Tibbs for $3,000 in property damage because the boat sank due to Mr. Tibbss negligence.