In addition to medical, home, and auto-insurance policies, you can choose to purchase additional policies to protect against other types of losses. Consider Manuel, a psychiatrist with a standard HO-2 policy with $450,000 of insurance on his home, an auto insurance policy with liability limits of 100/300/50, and a professional liability policy with a $50,000 limit. His daughter recently took a course in personal finance and wants to make sure her father is adequately protected from potential losses. She knows her father has all the standard policies, so she reviews a number of situations that aren't always covered under standard policies. For each of the following scenarios, indicate the type of coverage-one Manuel already has or one he should purchase-that would protect against the loss described. How to Protect Against This Loss A flood destroys the basement of the home, causing $20,000 in damage. A burglar steals a piece of art (valued at $85,000) from his living room. The laptop he uses for work is stolen out of his car. In addition to these policies, he is considering an umbrella liability insurance policy with limits of $1 million. Which of the following statements regarding umbrella policies are true? Check all that apply. If Manuel's mother-in-law trips on a broken step on his porch and suffers injuries that require $120,000 in medical care, his umbrella policy will cover the difference between the total cost and what the HO-2 covers. If Manuel is sued by a client and must pay $25,000 in damages, this amount will come directly out of his umbrella policy. O The cost of the additional umbrella policy is high and is only worth that cost if Manuel is wealthy. In addition to medical, home, and auto-insurance policies, you can choose to purchase additional policies to protect against other types of losses. Consider Manuel, a psychiatrist with a standard HO-2 policy with $450,000 of insurance on his home, an auto insurance policy with liability limits of 100/300/50, and a professional liability policy with a $50,000 limit. His daughter recently took a course in personal finance and wants to make sure her father is adequately protected from potential losses. She knows her father has all the standard policies, so she reviews a number of situations that aren't always covered under standard policies. For each of the following scenarios, indicate the type of coverage-one Manuel already has or one he should purchase-that would protect against the loss described. How to Protect Against This Loss A flood destroys the basement of the home, causing $20,000 in damage. A burglar steals a piece of art (valued at $85,000) from his living room. The laptop he uses for work is stolen out of his car. In addition to these policies, he is considering an umbrella liability insurance policy with limits of $1 million. Which of the following statements regarding umbrella policies are true? Check all that apply. If Manuel's mother-in-law trips on a broken step on his porch and suffers injuries that require $120,000 in medical care, his umbrella policy will cover the difference between the total cost and what the HO-2 covers. If Manuel is sued by a client and must pay $25,000 in damages, this amount will come directly out of his umbrella policy. O The cost of the additional umbrella policy is high and is only worth that cost if Manuel is wealthy
