THE FINCH FAMILY HOMEOWNERS CONTRACT

Assume the Finch family of Charlotte, North Carolina, purchased their home in 1966 for $42,000. Since then, comparable homes in their neighborhood have most recently sold for $84,000. The cost to replace the home would be $75,000. It is estimated that the house is one-third depreciated. The Finchs have a $60,000 (Coverage A) Homeowners policy in force, similar to the policy shown in the Appendix. Answer the following questions as if each question were a separate event.

1) How much will the Finchs collect for a total covered fire loss under coverage A?

2) How much will be collected for a $20,000 partial loss under coverage A?

3) What would be your answers to questions 1 and 2 above if the Finchs had only $42,000 of insurance of Coverage A?

4) What would be your answers to questions 1, 2, and 3 above if there is a $1,000 deductible on Section I?