Question

most home insurance policies cover jewelry for $1,000 and silverware for $2,500 unless the items are covered by additional insurance. if $4,470 worth of jewelry and $3,660 worth of silverware were stolen from a family, what amount of the claim would not be covered by insurance?

Answer 1

The claim amount is $4,630, which is not covered by insurance.

What is claim amount?

• The sum payable at the maturity of an insurance policy or upon the death of the person insured to the beneficiary, nominee, or legal heir of the insured is known as the claim amount.

• The actual loss incurred by the Insured with respect to a Loan as calculated in accordance with Section V is referred to as the Claim Amount.

• Claim = Loss Suffered x Insured Value/Total Cost The goal of such an Average Clause is to limit the Insurance Company's liability.

• A Claim Payment is an amount paid to you under the Policy to compensate you for credit losses caused by unpaid insured receivables.

Therefore,

The insurance company will pay the greater of the claim amount or the insurance coverage limit for each item. Because the values of the stolen jewelry and silverware exceed their individual coverage limits, the insurance company will pay the $1,000 for jewelry and $2,500 for silverware coverage limits.

Amount not covered by insurance = ($4,470 - 1,000) + ($3,660 - 2,500)

= 3,470 + 1,160

= $4,630