Question

In: Finance

When you buy an HO policy, you should purchase enough insurance to pay for ______ of...

When you buy an HO policy, you should purchase enough insurance to pay for ______ of the cost of replacing your dwelling and your personal property.

100%.

80%.

50%.

120%.

Solutions

Expert Solution

80%.

The 80% rule means that , insurer will be willing to cover the loss only if the home owner has purchased enough insurance to pay for atleast 80% of the cost of replacing your dwelling and your personal property.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

An insurance policy promises to pay you and your heirs $2,500 per year forever, should you...
An insurance policy promises to pay you and your heirs $2,500 per year forever, should you become ill. How much would you pay for this policy today if the cost of capital (or rate of return) is 6% and you are factoring 2% growth?
Explain why hedging is like buying an insurance policy. To buy an insurance policy, you need...
Explain why hedging is like buying an insurance policy. To buy an insurance policy, you need to pay a premium; what is the corresponding premium in hedging? Give an example to clarify your answer.
You are going to make a substantial purchase. You have enough money to pay cash, but...
You are going to make a substantial purchase. You have enough money to pay cash, but don’t know if that’s the way to make best use of your assets. Maybe you should take out an installment loan to make the purchase and invest the cash you would otherwise have used to pay for it. Use the information provided to complete the following worksheet and analyze how the numbers work out most favorably for you. For simplicity, compounding is ignored in...
An insurance company is trying to sell you an investment policy that will pay you and...
An insurance company is trying to sell you an investment policy that will pay you and your heirs $100,000 per year forever. If the required return on this investment is 6.5 percent, how much will you pay for the policy? A. $1,538,461.54 B. $925,925.93 C. $1,265,455.25 D. $2,627,950.42
You are looking to purchase a 25 year life insurance policy for $150,000. The policy will...
You are looking to purchase a 25 year life insurance policy for $150,000. The policy will pay annually at the end of the year. The current market interest rate is 2.5%. What should the annual payment per year be? show all your works
You are offered an insurance policy that will pay you and your heirs $25,000 a year...
You are offered an insurance policy that will pay you and your heirs $25,000 a year forever, with the first cash flow coming 40 years from today. The policy will cost you $130,000 today. If the interest rate is 4%, is this a good deal?
A life insurance co. is trying to sell you an investment policy that will pay you...
A life insurance co. is trying to sell you an investment policy that will pay you and your heirs $15367 per year forever. If the policy costs $546357 today, at what interest rate (in percent) is it properly priced? Answer to two decimals.
An insurance company quotes you a policy that requires you to pay $800.00 at the beginning...
An insurance company quotes you a policy that requires you to pay $800.00 at the beginning of each month for the following year. If you can earn 5.16% APR with monthly compounding on your investments, what is the value of this policy in today's dollars? (express as positive number)
12. Buy on time or pay cash? You are going to make a substantial purchase. You...
12. Buy on time or pay cash? You are going to make a substantial purchase. You have enough money to pay cash, but don’t know if that’s the way to make best use of your assets. Maybe you should take out an installment loan to make the purchase and invest the cash you would otherwise have used to pay for it. Use the information provided to complete the following worksheet and analyze how the numbers work out most favorably for...
12. Buy on time or pay cash? You are going to make a substantial purchase. You...
12. Buy on time or pay cash? You are going to make a substantial purchase. You have enough money to pay cash, but don’t know if that’s the way to make best use of your assets. Maybe you should take out an installment loan to make the purchase and invest the cash you would otherwise have used to pay for it. Use the information provided to complete the following worksheet and analyze how the numbers work out most favorably for...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT