Question $333$ Marks

a$.$ If Arman has a $$600,000$ home insured for $$450,000,$ based on the $80$ percent co$-$insurance

provision, $9$ Marks

i$.$ how much would the insurance company pay on a $$20,000$ claim?

ii$.$ If the claim was for $$300,000$ how much would the insurance company pay out?

iii. Is the cost savings on the annual premium worth it$?$

b$.$ Saif & Janail currently insure their cars with separate companies paying $$1,450$ and $$1,275$ a

year. If they insured both cars with the same company, they would save $10$ percent on the annual

premiums. $5$ Marks

i$.$ What would be the future value of the annual savings over ten years based on an annual

interest rate of $6$ percent?

c$.$ For each of the following situations, what amount would the insurance company pay? $9$ Marks

i$.$ Wind damage of $$2,000$; the insured has $$500$ deductible.

ii$.$ Theft of an entertainment system worth $$2,300$; the insured has a $$1,000$ deductible.

iii. Vandalism that does $$375$ of damage to a home; the insured has a $$500$ deductible.

d$.$ Why is it important for people who rent to have insurance? $5$ Marks

e$.$ What is the difference between cash value and replacement value? $5$ Marks

Insurance $-$ Life, Health, and Disability Insurance