In: Operations Management
1. Car insurance and homeowners insurance both offer medical payments coverage. Explain how and why this coverage differs with respect to both types of insurance.
2. Car insurance and homeowners insurance both offer personal liability coverage. Explain how and why this coverage differs with respect to both types of insurance.
3. Car insurance and homeowners insurance both offer coverage for property damage (to your own property). Explain how and why this coverage differs with respect to both types insurance.
4. Explain by comparing and contrasting car insurance and homeowners insurance how what is insured (i.e., car vs. house) determines the structure of an insurance policy (i.e., types of coverages and their relative importance).
5. Why is damage to a car insured on an actual cash value basis, while damage to a house is insured on a cost replacement basis? What would happen if it were the other way round?
Question 1. The difference in medical payment in car insurance and homeowner insurance.
Medical payment in car insurance gives you the coverage of medical expenses arising due to an accident it covers the driver and legally permitted number of additional passengers if any passengers are injured due to the accident. Medical payment in car insurance gives you coverage of medical expenses only related to the accident and not for any pre-existing conditions. The injury must be proven as a result of the accident. Moreover, it does not cover the medical expense of any third party who got injured because of the accident. Passengers must be in the insured car only.
However, the medical payment in homeowner insurance covers the injury due to an accident for the reason listed in the coverage terms and conditions. Like fall or slip etc. In this insurance, the injury to the third party who was at your home during the accident is also covered. For example, if your neighbor was at your home when your dog bite him, in this case, the expense by your neighbor for a dog bite can be covered through the medical payment given in your homeowner's insurance.