Chapter 10, Problem 7CC

Summary Introduction

Case summary:

J and R are newlyweds. They have just purchased their home and J and R are going to be parents of twins. They need to consider the insurance needs. With a family, a home and coming twins, they need to develop a plan to help them ready for an unexpected event.

Character in this case: J and R.

Adequate information:
Checking account: $4,300
Savings account: $22,200
Emergency fund savings account: $20,500
IRA balance: $26,000
Car: $10,000 (J) and $18,000 (R)
Student loan balance: $0
Credit card balance: $2,000
Car loans: $6,000
J: $50,000 gross income ($37,500 net income after taxes)
R: $75,000 gross income ($64,000 net income after taxes)
Mortgage: $1,252
Property taxes and insurance: $500
Utilities: $195
Food: $400
Gas/maintenance: $275
Credit card payment: $250
Car loan payment: $289
Entertainment: $300

To determine:

Type of automobile coverage for them.