Question
In: Finance
Jerry Carter's home is currently valued, on a replacement cost basis, at $502,000. When he last...
Jerry Carter's home is currently valued, on a replacement cost basis, at $502,000. When he last checked his policy, his home was insured for $377,742 and he did not have an inflation guard endorsement. If he has a $40,010 claim due to a kitchen fire, how much will his homeowner's insurance policy pay? How much would be paid if his home were totally destroyed? In order to obtain full replacement coverage, how much insurance should Jerry carry on his house?
If he has a $40,010 claim due to a kitchen fire, his homeowner's policy would pay $_____ (Round to the nearest dollar.)
Solutions
Expert Solution
1: Amount paid = amount of claim since it is within insured amount
= $40010
2: Amount paid = Insured amount
= $ 377742
3: To get full replacement coverage, amount of insurance = Replacement cost of the house
= $502,000
jeff jeffy answered 1 year agoRelated Solutions
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