A homeowner's insurance policy that includes a provision for __________ would provide the homeowner with enough cash to replace the items lost with new items. Multiple Choice cash in lieu of coverage guaranteed replacement cost full collateral damage protection actual book value protection
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Step 1: Understand the question - The question is asking about a provision in a homeowner's insurance policy that would provide the homeowner with enough cash to replace lost items with new items. Show more…
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Consider a household that possesses $100,000 worth of valuables (computers, stereo equipment, jewellery, and so forth). This household faces a 0.10 probability of a burglary. If a burglary were to occur, the household would have to spend $20,000 to replace the stolen items. Suppose it can buy an insurance policy for $500 that would fully reimburse it for the amount of the loss. a) Should the household buy this insurance policy? b) Should it buy the insurance policy if it cost $1,500?
Akash M.
Suppose a policy provides like-kind replacement cost coverage for the dwelling and that $80,000 of coverage is purchased. How much will the insurer pay under each of the following scenarios (ignoring any deductible): Loss Replacement Cost for the Dwelling at time of loss $20,000 $100,000 $80,000 $100,000 $20,000 $130,000 $80,000 $130,000
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