Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $230,000 and insured it (via an HO-5 policy) for $200,000. The policy reimburses for actual cash value and has a $1,000 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a 4-year-old television set with a current replacement value of $1,500 and an estimated useful life of 6 years. They also took jewelry valued at $1,400 and silver flatware valued at $3,700.   If the Browns’ policy has an 80% co-insurance clause, do they have enough insurance?   Yes or No   Assuming a 50% coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items. Do not round intermediate calculations. Round the answer to two decimal places. $  _____________________   What advice would you give the Brown family about their homeowner's coverage?

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
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Last year, Thea and Rory Brown bought a home with a dwelling replacement value of $230,000 and insured it (via an HO-5 policy) for $200,000. The policy reimburses for actual cash value and has a $1,000 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a 4-year-old television set with a current replacement value of $1,500 and an estimated useful life of 6 years. They also took jewelry valued at $1,400 and silver flatware valued at $3,700.

 

If the Browns’ policy has an 80% co-insurance clause, do they have enough insurance?

  Yes or No

 

    1. Assuming a 50% coverage C limit, calculate how much the Brown family would receive if they filed a claim for the stolen items. Do not round intermediate calculations. Round the answer to two decimal places.
      $  _____________________

 

  1. What advice would you give the Brown family about their homeowner's coverage?
    ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
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