1. Eric and Susan just purchased their first home, which cost $136,000. They purchased a homeowner's policy to insure the home for $126,000 and personal property for $78,000. They declined any coverage for additional living expenses. The deductible for the policy is $500. Soon after Eric and Susan moved into their new home, a strong windstorm caused damage to their roof. They reported the roof damage to be $18,500. While the roof was under repair, the couple had to live in a nearby hotel for three days. The hotel bill amounted to $380. 
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3. Assuming the insurance company settles claims using the replacement value method, what amount will the insurance company pay for the damages to the roof?

Answer rating: 100% (QA)

In this scenario since the insurance company settles claims using ... View the full answer