Chapter 10 Financial Planning Exercise 2

Evaluating homeowner's policy coverage

Last year, Brett and Amber Walsh bought a home with a dwelling replacement value of $240,000 and insured it (via an HO-5 policy) for $209,000. The policy reimburses for actual cash value and has a $250 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a 3-year-old television set with a current replacement value of $400 and an estimated useful life of 6 years. They also took jewelry valued at $1,700 and silver flatware valued at $4,200.

Assuming a 50% coverage C limit, calculate how much the Walshes would receive if they filed a claim for the stolen items. Round the answer to two decimal places.