Roger’s office building has a $320,000 value, a 2 rating, and a B building classification. The contents in the building are valued at $105,000. Calculate his total annual premium. (Use Table 20.3.)
Roger’s office building has a $320,000 value, a 2 rating, and a B building classification. The contents in the building are valued at $105,000. Calculate his total annual premium. (Use Table 20.3.)
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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Roger’s office building has a $320,000 value, a 2 rating, and a B building classification. The contents in the building are valued at $105,000. Calculate his total annual premium. (Use Table 20.3.)
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Transcribed Image Text:**Table 20-3: Fire Insurance Rates**
This table presents fire insurance rates per $100 of coverage for buildings and contents, categorized by building classifications and area ratings.
**Columns Explained:**
1. **Rating of area**: Indicates the classification of the area's fire risk on a scale from 1 to 3, with 1 being the lowest risk and 3 the highest.
2. **Classification of Building**: Divided into two classes:
- **Class A**:
- **Building**: Insurance rates are $0.28, $0.33, and $0.41 per $100 for area ratings 1, 2, and 3, respectively.
- **Contents**: Insurance rates are $0.35, $0.47, and $0.50 per $100 for area ratings 1, 2, and 3, respectively.
- **Class B**:
- **Building**: Insurance rates are $0.41, $0.50, and $0.61 per $100 for area ratings 1, 2, and 3, respectively.
- **Contents**: Insurance rates are $0.54, $0.60, and $0.65 per $100 for area ratings 1, 2, and 3, respectively.
The table demonstrates how fire insurance rates increase with higher area ratings and vary between different building classifications.
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