Question

Jane & Sue both have HO insurance.

Jane has a Dwelling limit of $500,000 with a deductible of $2000 and a $1million Liability limit.

Sue has a Dwelling limit of $750,000 with a deductible of $5000 and a $2million Liability limit.

Sue is visiting Jane and a heavy light fixture falls on her head. Sue’s medical expenses are $10,000 (ambulance, emergency room services, stitches, overnight stay for concussion).

1. Whose policy is ultimately responsible for Sue’s losses?

2. What coverage part of the HO insurance policy is reimbursing Sue?

3. How much does the insurance policy pay Sue?

Answer 1

1. Jane’s policy is ultimately responsible for Sue’s loss under home owners Insurance Policy.

2. In home owners insurance policy, it includes the coverage for any of the damage in the house (either interior or exterior), assets or the things inside house by accidental damage, if the home damages other person property, or any of the visitors to the home. Under coverage of damage to the visitors to the home, Sue’s loss will be reimbursed.

3. Jane’s liability limit is $1million and Sue’s medical expenses is $10,000 which fall under Jane’s liability limit. So entire expenses will be covered i.e., $10,000. But the coverage includes deductible of $2000.

$10,000 - $2000 = $8000

Thus, the insurance policy pay $8000 to Sue