Reference no: EM131134346
Principles of Risk Management and Insurance (12 ed)
Tom and Cindy Jones insured their home and personal property under an unendorsed Homeowners 3 policy. The home has a current replacement cost of$300,000. The policy contains the following limits:
Coverage A $240,000
Coverage B $ 24,000
Coverage C $120,000
Coverage D 72,000
The home was badly damaged in a fire, and family was forced to live in a motel for 60 days while their home was being rebuilt. Undamaged personal property was stored in a rental unit during the period of reconstruction. What dollar amount, if any, is payable under their Homeowners 3 policy for the following (ignore any deductible)?
a.Three bedrooms were totally destroyed in the fire. The replacement cost of restoring the bedrooms is $80,000. The actual cash value of the loss is $50,000.
b.Monthly mortgage payment of $1500 on their home.
c.Rental of motel room at $100 daily for 60 days
d.Meals eaten in the motel restaurant for 60 days at an average cost of $60 daily (food costs at home average $20. Daily)
e.Rent for strong undamaged furniture in a rental unit while the home is being rebuilt, $ 200 monthly
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Principles of risk management and insurance
: Tom and Cindy Jones insured their home and personal property under an unendorsed Homeowners 3 policy. The home has a current replacement cost of$300,000. The policy contains the following limits:
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