Caitlin purchased an unendorsed ISO Homeowners 3 policy. Her “Coverage A” limit (the insurance on the Dwelling) is $220,000. How will the following claims be settled?

a. The roof of Caitlin’s home was damaged by strong wind. The replacement cost of the damage less depreciation was $9,000. The replacement cost of the damage was $12,000. Caitlin’s home was valued at $300,000 at the time the roof was damaged. Assume a $500 deductible applies to this loss. How much will the insurer pay Caitlin to settle this claim

b. A spark from the fireplace started a fire in Caitlin’s living room. The fire destroyed Caitlin’s living room set – a couch and two chairs. The living room set cost $4,000 when it was purchased, and it was worth $3,000 at the time of the loss because of depreciation. A comparable replacement living room set will cost $4,400. How much will the insurer pay to settle this claim? Assume a $500 deductible applies to this loss.

Answer rating: 100% (QA)

a The replacement cost of the damage less depreciation ... View the full answer