Question

Cheyenne has a home insured for $300,000. It would cost $320,000 to rebuild her home. If she has home insurance that provides personal property coverage at 70% of value, how much of her household belongings would be covered?a $320,000

b $224,000
c $300,000
d $120,000
e $210,000

Answer 1

Cheyenne's home insurance provides personal property coverage at 70% of the $300,000 insured value. The calculation is 0.70 multiplied by $300,000, giving a coverage of $210,000 for personal belongings.

Step-by-step explanation:

Cheyenne's home insurance policy offers personal property coverage at 70% of the home's insured value. To calculate the personal property coverage amount, we will use the insurance value of the home, which is $300,000, rather than the rebuild cost ($320,000).

The calculation for Cheyenne's personal property coverage is as follows:

• Coverage percentage: 70%
• Home's insurance value: $300,000
• Covered personal property amount = 0.70 * $300,000

Let's do the math:

Covered personal property amount = 0.70 * $300,000
= $210,000

Therefore, the amount of Cheyenne's household belongings that would be covered by the insurance policy is $210,000. The correct answer is (e) $210,000.

Answer 2

option (e) $210,000

Step-by-step explanation:

Data provided in the question:

Amount for which the home is insured = $300,000

Cost to rebuild the home = $320,000

Personal property coverage provided = 70% of value

Now,

The value of the property will be the amount for which it has been insured irrespective of the amount spent on rebuilding the property

Therefore,

Household belongings that would be covered will be

= 70% of $300,000

or

= 0.70 × $300,000

= $210,000

Hence,

The correct answer is option (e) $210,000