Question

2. The Springers' home has a replacement value of $287,000. It isinsured for 90% of the replacement cost.a. What is the amount of insurance?b. What is the amount of coverage for personal property?c. What is the amount of coverage for loss of use?d. What is the amount of coverage for the garage?

Answer 1

Given -

Replacement value of Springers' home = $287,000

Insured replacement cost = 90%

To Find -

a. What is the amount of insurance?

b. What is the amount of coverage for personal property?

c. What is the amount of coverage for loss of use?

d. What is the amount of coverage for the garage?

Step-by-Step Explanation -

(a) Amount of insurance = 90% of the replacement cost

So,

Amount of insurance = 90% of $287,000

Amount of insurance = (90/100) × $287,000

Amount of insurance = 90 × 2870

Amount of insurance = $258,300

(b) Amount of coverage for personal property = 50% of the Amount of insurance

So,

Amount of coverage for personal property = 50% of $258,300

Amount of coverage for personal property = (50/100) × $258,300

Amount of coverage for personal property = 50 × 2583

Amount of coverage for personal property = $129,150

(c) Amount of coverage for loss of use = 20% of the Amount of insurance

So,

Amount of coverage for loss of use = 20% of $258,300

Amount of coverage for loss of use = (20/100) × $258,300

Amount of coverage for loss of use = 20 × 2583

Amount of coverage for loss of use = $51,660

(d) Amount of coverage for the garage = 10% of the Amount of insurance

So,

Amount of coverage for the garage = 10% of $258,300

Amount of coverage for the garage = (10/100) × $258,300

Amount of coverage for the garage = 10 × 2583

Amount of coverage for the garage = $25,830

Final Answer -

a. Amount of insurance = $258,300

b. Amount of coverage for personal property = $129,150

c. Amount of coverage for loss of use = $51,660

d. Amount of coverage for the garage = $25,830