Your answer for this specific question is a. The age and outdated structural design of the house implies that remodeling is likely. This warrants a higher premium.
1) Rachel just purchased a homeowners insurance policy for her new home that costs $0.43 per $100. Her home is worth $387,500. What is Rachel’s annual homeowners insurance premium?
a.
$1,666.25
2) Ben just purchased a house in an older neighborhood. After talking to several neighbors across the street, he found that he is paying much more in homeowners insurance than other homeowners in the neighborhood.
Ben’s house is about 30 years old. It is made of wood framing and stucco texture. It has all of it’s original plumbing and electrical work. The brick wall at the back of his back yard separates his yard from a drainage wash.
Which of the following is not a reasonable argument for the insurance company to use to justify Ben’s higher homeowners insurance premium?
a.
The age and outdated structural design of the house implies that remodeling is likely. This warrants a higher premium.
3) The house Tara and Levi purchased is valued at $425,000. Which of the following statements accurately describes the difference between the two plans?
.
c.
Thompson’s Insurance is cheaper even if Tara and Levi experience an incident that results in severe damage or loss to their home.
4) Zach is looking for a homeowners insurance policy for his new house. AAA Insurance company has offered him a plan that insures his home annually for $0.36 per $100 of value in the home. In order to make calculations easier, Thompson’s Insurance lists their annual homeowners insurance premium a bit differently, at $3.63 per $1,000 of value in the home.
Zach’s house is worth $289,000. What should Zach be thinking as he chooses between the two insurance companies?
b.
The annual premium for his house would be cheaper through AAA.
5) Sally just purchased a beautiful home on a riverbank for what she thought was a very good deal. She later learned that her house was very susceptible to flood damage during the rainy season. Which of the following statements best describes the effect the location of Sally’s new home will have on her homeowners insurance premium?
a.
Financial loss due to flood damage is likely. Her insurance premiums will be higher than homes not on the waterfront.
6) In many cases, lenders allow homeowners to include their homeowners insurance premium with their monthly mortgage payment. Tim’s home is worth $279,500. If his homeowners insurance premium is $0.33 per $100, how much is added to his monthly mortgage payment for insurance?
b.
$76.86
7) Which of the following is a cost homeowners insurance does not protect?
c.
Replacement costs for all contents in your home, including high cost electronics.
8) Which of the following is something that will not affect your homeowners insurance premium?
a.
the distance of the home from a school
9) Which of the following will not help Robert lower his homeowners insurance premium?
d.
Increase the total coverage of his home on his policy.
10) Cesar’s annual homeowners insurance premium is $972.80. If his home is valued at $253,000, roughly how much is Cesar paying for homeowners insurance?
d.
$0.38 per $100 of value