Homeowners Insurance Case Situation

A home owned by Robert and Valerie has an actual replacement cost of $260,000. It is insured under a HO-3 policy for $175,000. They have personal property coverage of $85,000, and own antiques valued at $9,000 a jewelry valued at $16,000 and a fishing boat valued at $20,000.

1. Are their present coverages are adequate? If not, make several recommendations for improving the coverage.

2. A Fire damaged one bedroom of the home. The actual cash value of the loss is $10,000. The cost of repairs is $16,000. How much will the insurer pay for the loss?

3. A burglar broke into the home and stole a new television, jewelry, and several paintings. The actual cash value of the stolen property is $4,000. The cost of replacing the property is $9,000. In addition, the antiques were taken. Indicate the extent, if any, to which an unendorsed HO-3 policy will cover these losses.

4. Assume that Robert and Valerie have a disagreement with their insurer concerning the value of the above losses. How would the dispute be resolved under their HO-3 policy?

5. Assume that Valerie operates a bookkeeping business from her hom Her home business office contains a computer used solely for business, office furniture, file cabinets, and other business personal property. Explain whether her HO-3 policy would cover business personal property used in a home business.