Question: Marisa has a policy with replacement cost coverage and has a loss of $100,000 on a house. Total policy coverage is $300,000 and replacement cost

Marisa has a policy with replacement cost coverage and has a loss of $100,000 on a house. Total policy coverage is $300,000 and replacement cost is $400,000. Because the loss is less than the coverage, she expects to get the full amount of the claim paid by the insurance company. Is she correct? Why?

Step by Step Solution

★★★★★

3.45 Rating (161 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To conclude we can say that the amount ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1240-B-C-F-F-P-M(1623).docx

120 KBs Word File

Students Have Also Explored These Related Corporate Finance Questions!

How much would a homeowner 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 $1,000 to replace today, whereas...

1. Toula and Ian Miller of Lincoln, Nebraska, recently suffered a fire in their home. The fire, which began in a crawl space at the back of the house, caused $24,000 of damage to the dwelling. The...

Tom and Cindy Jones insured their home and personal property under an unendorsed Homeowners 3 policy. The home has a current replacement cost of $300,000. The policy contains the following limits:...

Marisa has a policy with replacement cost coverage and 80% co-insurance, and has a loss of $100,000 on her house. The replacement cost is $400,000 and the total policy coverage is $300,000. Since the...

SMITH FAMILY FINANCIAL PLAN (B) SMITH FAMILY UPDATE It was now May 1, 2013, and Matt had just finished a follow-up meeting with Joel and Amber Smith. They had followed some of the advice they...

You are working with EPLAS accountimg firm as a management accountant. Recently, a fire broke out in the business premise and EPLAS accounting firm suffered a USD4.4 million loss to the building, and...

Assignment: Chapter 10 - Protecting Your Property 2. The basic principles of property insurance Aa Aa What Are the Basic Principles of Property Insurance? There are two major types of insurance that...

A company enters into a contract to sell 70 products to a customer for $80 each. After the company transfers 30 of the 70 products, the customer orders an additional 25 products. The contract is...

Carolina Company experienced the following events during 2013. 1. Acquired $50,000 cash from the issue of common stock. 2. Paid $15,000 cash to purchase land. 3. Borrowed $25,000 cash. 4. Provided...

8-9 What is the purpose of an inventory classification system such as the ABC method?

1. 6.7 In Solved Problem 14.4, what fixed cost would result in four firms operating in the monopolistically com petitive equilibrium? What are the equilibrium quan tities and prices? 7. Challenge

The Alliance Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The companys...

The price of Applied Adhesives, Inc., Inc. is now $85. The company pays no dividends. Adam Gardner expects the price 4 years from now to be $125 a share. Should Adam buy Applied Adhesives if he wants...

Kimberly Bishop is thinking about investing in some residential income-producing property that she can purchase for $200,000. Kimberly can either pay cash for the full amount of the property or put...

A liquid stream contains 0 . 0 2 mol % of solute B in water at 1 0 0 . 0 o C . Solute B will be removed from this liquid stream in a stripper using steam at 1 0 0 . 0 o C . Entering steam is pure...

CORPORATE VALUATION Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFS) during the next 3 years, after which FCF is expected to...

Vincent Corp. preferred stock is selling for $80 per share in the market. This preferred stock has a par value of $100 and a dividend rate of 8 percent. Required: a) What is the current yield on the...