The homeowner had an explosion accident of X amount of loss on a replacement cost basis....
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The homeowner had an explosion accident of X amount of loss on a replacement cost basis. You are given the following: 1. the value of the insured house is $15,000 at the time of the accident. ii. the loss random variable X is uniform distributed in the range of 80 thousands and 110 thousands. iii. the loss X is reimbursed in full if the insured amount exceeds 70% of the house value at the time of the accident. Otherwise, X is reimbursed on a pro-rata basis of what would have been paid had the 70% requirement been met. iv. the owner has insured the house for $100,000, which is also the policy limit. Determine the expected amount the insurer pay toward reimbursing the homeowner? The homeowner had an explosion accident of X amount of loss on a replacement cost basis. You are given the following: 1. the value of the insured house is $15,000 at the time of the accident. ii. the loss random variable X is uniform distributed in the range of 80 thousands and 110 thousands. iii. the loss X is reimbursed in full if the insured amount exceeds 70% of the house value at the time of the accident. Otherwise, X is reimbursed on a pro-rata basis of what would have been paid had the 70% requirement been met. iv. the owner has insured the house for $100,000, which is also the policy limit. Determine the expected amount the insurer pay toward reimbursing the homeowner?
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Answer rating: 100% (QA)
To determine the expected amount the insurer will pay toward reimbursing the homeowner we need to consider the different scenarios based on the policy ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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