Question

In: Operations Management

1. Car insurance and homeowners insurance both offer medical payments coverage. Explain how and why this...

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?

Solutions

Expert Solution

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.


Related Solutions

Who is an “insured” under the Homeowners Insurance Policy? Explain the purpose of Uninsured Motorist Coverage?...
Who is an “insured” under the Homeowners Insurance Policy? Explain the purpose of Uninsured Motorist Coverage? List four additional property coverage items included under the standard Homeowners Insurance Policy
Insurance (explain the different types of insurance coverage you need including health, life, auto, homeowners, etc....
Insurance (explain the different types of insurance coverage you need including health, life, auto, homeowners, etc. With each type of insurance coverage explain how to select the appropriate amount of insurance and the benefits/costs of such coverage) (for the last part of explaining how to select the appropriate amount of insurance and the benefits/costs of such coverage, please explain about Health insurance only )
How is insurance coverage affected if you fail the medical exam?
How is insurance coverage affected if you fail the medical exam?
Explain the different types of insurance coverage you need including health, life, auto, homeowners. With each...
Explain the different types of insurance coverage you need including health, life, auto, homeowners. With each type of insurance coverage explain how to select the appropriate amount of insurance and the benefits/costs of such coverage
Aircraft liability coverage is similar to automobile liability except for the inclusion of medical payments coverage....
Aircraft liability coverage is similar to automobile liability except for the inclusion of medical payments coverage. admitted liability coverage. world wide coverage. the absence of an employee exclusion.
Adverse Selection: Suppose Snake Farm insurance provides fire insurance coverage to 10,000 homeowners in California.
Adverse Selection: Suppose Snake Farm insurance provides fire insurance coverage to 10,000 homeowners in California. Based on historical data, Snake Farm’s expert statisticians (a.k.a actuaries) have calculated that in a given year on average 100 of Snake Farms customers will lose their homes due to a fire. The historical data also shows that the average cost of replacing a house is $100,000.Assuming that Snake Farm’s must charge the same insurance premium to all its customers, how much will Snake Farm...
List four additional property coverage items included under the standard Homeowners Insurance Policy
List four additional property coverage items included under the standard Homeowners Insurance Policy
How can insurance companies offer a guarantee to pay for certain medical expenses? How do they...
How can insurance companies offer a guarantee to pay for certain medical expenses? How do they determine the appropriate premium to charge?
EXPLAIN Insurance Coverage in detail in any one of the following areas: 1) Auto Insurance -...
EXPLAIN Insurance Coverage in detail in any one of the following areas: 1) Auto Insurance - Property and Liability; 2) Homeowner’s or Renter’s Insurance – Property and Liability; 3) Health Insurance Policy; 4) Disability Insurance; or 5) Life Insurance.
4.How does health insurance coverage affect the incentive to reduce medical expenses? For the insured person?...
4.How does health insurance coverage affect the incentive to reduce medical expenses? For the insured person? For the provider of services? What happens to the incentive to hold down medical expenses once the initial insurance deductible is met?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT