Question
Newlyweds Jamie Lee and Ross have had several milestones in the past year. They are newly married, recently purchased their first home, and now have
Newlyweds Jamie Lee and Ross have had several milestones in the past year. They are newly married, recently purchased their first home, and now have twins on the way!
Jamie Lee and Ross have to seriously consider their insurance needs. With a family, a home, and now babies on the way, they are working on developing a risk management plan to help them should an unexpected event arise.
Jamie Lee and Ross created a Household Inventory (see Addendum C), excluding the $2,000 diamond wedding band set. They have elected not to get any further liability or other specialized coverage at this time. Currently, their home has increased in value by $12,000 since they purchased it five years ago. If something unfortunate should happen, they want to ensure that they are able to rebuild their home using the most current costs.
Use this information to complete the table below and determine the total amount of property insurance coverage they will need. Each answer must have a value for the assignment to be complete. Enter "0" for any unused categories.
Current Financial Situation
| Assets: | Income: | ||
| Checking account | $5,700 | Gross income (Jamie Lee) | $64,000 |
| Savings account | $23,600 | Net income after taxes (Jamie Lee) | $48,000 |
| Emergency fund savings account | $21,900 | Gross income (Ross) | $89,000 |
| IRA balance | $27,400 | Net income after taxes (Ross) | $75,650 |
| Car (Jamie Lee) | $11,400 | Monthly Expenses: | |
| Car (Ross) | $19,400 | Mortgage | $1,435 |
| Liabilities: | Property taxes and insurance | $640 | |
| Student loan balance | $0 | Utilities | $115 |
| Credit card balance | $2,000 | Food | $470 |
| Car loans | $7,400 | Gas/maintenance | $345 |
| Original purchase price of home | $299,000 | Credit card payment | $320 |
| Car loan payment | $303 | ||
| Entertainment | $370 |
| Real Property (not applicable to renters) | ||
| Current replacement value of home | not attempted | |
| Personal Property | ||
| Estimated value of appliances, furniture, clothing, and other household items (conduct an inventory) | not attempted | |
| Type of coverage for personal property | not attempted | |
| Additional coverage for items with limits on standard personal coverage such as jewelry, firearms, silverware, and photographic, electronic, and computer equipment | ||
| Diamond wedding band set | not attempted | |
| Personal Liability | ||
| Amount of additional personal liability coverage desired for possible personal injury claims | not attempted | |
| Specialized Coverages | ||
| If appropriate, investigate flood or earthquake coverage excluded from home insurance policies | not attempted | |
| Total Property Insurance Needed |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Commodity Finance
Authors: Weixin Huang
2nd Edition
0857196650, 978-0857196651
