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Howie Homeowner has owned his home for 8 years. He purchased it for $250,000 and the insurance company required a policy with 80% minimum coverage so Howie bought a $200,000 HO-3 homeowner's nsurance policy. He has a $2,500 deductible on his policy. He still Owns that policy, even though the replacement cost of the home is now $320,000. f Howie suffer a $40,000 fire loss to the home, what is the dollar amount: 1. The loss that would be covered by his policy (paid by the insurance

Howie Homeowner has owned his home for 8 years. He purchased it for $250,000 and the insurance company required a policy with 80% minimum coverage so Howie bought a $200,000 HO-3 homeowner's nsurance policy. He has a $2,500 deductible on his policy. He still Owns that policy, even though the replacement cost of the home is now $320,000. f Howie suffer a $40,000 fire loss to the home, what is the dollar amount: 1. The loss that would be covered by his policy (paid by the insurance

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Howie Homeowner has owned his home for 8 years. He purchased it for $250,000 and the insurance company required a policy with 80% minimum coverage so Howie bought a $200,000 HO-3 homeowner's insurance policy. He has a $2,500 deductible on his policy. He still owns that policy, even though the replacement cost of the home is now $320,000. If Howie suffer a $40,000 fire loss to the home, what is the dollar amount: 1. The loss that would be covered by his policy (paid by the insurance company) 2. The amount Howie must pay out of pocket 1) $29,297; 2) $10,703 1) $31,250; 2) $2,500 1) $40,000; 2) 0 1) $37,500; 2) $2,500 1) $20,000; 2) $20,000
Transcribed Image Text:Howie Homeowner has owned his home for 8 years. He purchased it for $250,000 and the insurance company required a policy with 80% minimum coverage so Howie bought a $200,000 HO-3 homeowner's insurance policy. He has a $2,500 deductible on his policy. He still owns that policy, even though the replacement cost of the home is now $320,000. If Howie suffer a $40,000 fire loss to the home, what is the dollar amount: 1. The loss that would be covered by his policy (paid by the insurance company) 2. The amount Howie must pay out of pocket 1) $29,297; 2) $10,703 1) $31,250; 2) $2,500 1) $40,000; 2) 0 1) $37,500; 2) $2,500 1) $20,000; 2) $20,000
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