1. Jody Solan currently insures her home for 100 percent of its replacement value with an HO-3 policy. For Jody, this works out to $189,000 in dwelling (Part A) coverage. What are the maximum dollar coverage amounts for Parts B, C, and D of her homeowner's policy?

2.Keith and Dena Diem have personal property coverage with a $250 limit on currency, a $1,000 limit on jewelry, and a $2,500 limit on gold, silver, and pewter. They do not have a personal property floater. If $500 in cash, $2,400 of jewelry, and $1,500 of pewterware are stolen from their home, what amount of loss will be covered by their homeowner's policy? If the Diems' deductible is $250, how much will they receive on their claim?

3.How much would a home owner receive with actual cash-value coverage and with replacement cost coverage for a 3-year-old sofa destroyed by a fire? The sofa would cost $1,180 to replace today, whereas it cost $1,091 3 years ago, and it has an estimated life of 6 years.

4.Carmella Estevez has a homeowner's insurance policy with $100,000 of liability insurance. She is concerned about the risk of lawsuits because her property borders a neighborhood park. What can she do to increase her liability coverage? How much will Carmella's yearly premiums change as a result of increasing her liability coverage?

5. Jerry Carter's home is currently valued, on a replacement cost basis, at $511,000. When he last checked his policy, his home was insured for $380,276, and he did not have an inflation guard endorsement. If he has a $41,441 claim due to a kitchen fire, how much will his homeowner's insurance policy pay? How much will he be paid if his home is totally destroyed? In order to obtain full replacement coverage, how much insurance should Jerry carry on his house?

6.Carmen Viers lost everything to a fire and has spent the last 8 weeks living in a motel room at a cost of $4,500. Her dwelling, which was destroyed as a result of a lighting strike, was insured with an HO-2 policy for $280,000. Prior to the loss, her home was valued at $300,000, her detached garage and pool house were valued at $38,000, and her personal property had an actual cash value of $91,000. To make matters worse, she sustained $10,000 in injuries while trying without success to save her three Greyhound dogs valued at $6,000 each. How much of her total losses and expenses will be reimbursed if she has a $1,000 deductible?

7.Larry Simmons has split-limit 150/225/110 automobile liability insurance. Several months ago Larry was in an accident in which he was found to be at fault. Four passengers were seriously injured in the accident and were awarded $176,000 each because of Larry's negligence. How much of this judgment will Larry's insurance policy cover? What amount will Larry have to pay out of pocket?

8. Bill Buckely has split-limit 25/50/10 automobile liability insurance on his 2012 Subaru. Driving home from work in a snowstorm, he hit a Mercedes, slid into a guardrail, and knocked down a telephone pole. Damages to the Mercedes, the guardrail, and the telephone pole were $8,500, $2,000, and $4,500, respectively. How much will Bill's insurance company pay? How much will Bill be required to pay directly?

9.Jessica Railes is purchasing a condo and is shopping for an HO-6 policy. Her auto insurer quoted her an annual rate of $640. However, if she insures both her condo and her car with the same company, the insurer will give her an additional 7 percent discount on her HO-6 policy and a 9 percent discount on her $1,498 annual auto premium. By how much will this reduce Jessica's premium? In addition to the discount, what are other advantages of purchasing both auto and homeowner's insurance with the same company?

10. The Superior Insurance Company of Maine recently advertised the following discounts for qualified drivers:

10 percent discount for drivers who have not had an accident in the past 7 years

15 percent discount for those with two or more cars; 5 percent discount for insuring both home and car

10 percent discount for those who drive less than 10,000 miles a year

25 percent discount for drivers who are good students (have a B average or above)

10 percent discount for drivers aged 50 or older; 5 percent discount for drivers aged 24 to 49

5 percent discount for drivers who have taken a defensive driving course

15 percent discount for noncommuters (less than 30 miles round-trip)

15 percent discount for cars with antitheft devices

Jana, 25 years old, currently pays $1,200 annually for a PAP for her 2011 Chevy Malibu. She uses her car to commute 40 miles round-trip to work and to make biannual cross-country trips to visit relatives. Last year she received a speeding ticket but took a defensive driving course in order to remove the ticket from her record; she has never had an accident. When she purchased her car, she had an alarm installed. Jana is sure that she qualifies for at least one or more discounts. Calculate her new premium if she transfers to the Superior Insurance Company.

Answer rating: 100% (QA)

Answer 1 Parts B C and D of Jodys homeowners policy will typically have coverage limits based on a percentage of the dwelling coverage amount For exam... View the full answer