Which of the following insurance coverage options would be the lowest priority for a typical single person 1-2 years out of college? Auto insurance (if they have a car) Renter's insurance (if they are renting an apartment) Health insurance Life insurance
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They likely have a car or access to one, rent an apartment, need health coverage, but probably do not have dependents or significant financial obligations that would require life insurance. Show more…
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5. Computing your liability - An auto insurance example Although car insurance is legally required by all states, the coverage provided by different policies can vary dramatically, such that even an "insured" motorist can end up paying large amounts of money out-of-pocket. Consider the following example involving Mitch, who has a family auto policy (FAP) that provides liability coverage with limits of 15/30/15, no medical payment insurance, and uninsured and underinsured motorist coverage with limits of 1/2. He has collision and comprehensive auto insurance, both with a deductible of $100. Suppose one day Mitch fails to notice a red light, causing him to blindside another car crossing the intersection. Fortunately, he is not badly injured, but the medical bill for his hospital examination nonetheless amounts to $624. The driver of the other car, a woman named Yvette, suffered severe injuries from the direct impact of the accident. She required surgery and a hospital stay and then additional procedures in the months that followed. Her medical bills, plus compensation for being unable to work, totaled $32,634. Yvette's insurance company successfully filed a claim against Mitch, exercising subrogation rights. Coverage A of Mitch's plan will reimburse him with ___________ for Yvette's medical bills. Mitch's medical bills are: not covered, covered under A, covered under B, covered under C Mitch's car was relatively unharmed by the collision but required $800 in minor repairs; Yvette's car was destroyed, making Mitch liable for paying the $9,300 replacement value. Yvette's car was pushed onto a nearby sidewalk on impact, destroying a nearby lawn and causing additional damage to a parked car. This damage totaled $7,254. Mitch's liability coverage also will reimburse him for up to $________ in property damage, so he is responsible for paying $1554 or $0 or $2354 or $3054 out-of-pocket in property liability damages. Which of the following is true regarding the damage to his own car? It will be reimbursed up to the difference between his liability coverage and the damage to other property. It will be reimbursed fully, minus the $100 deductible. It is not covered under his policy. Insuring an Older Home Susan's parents live in a Brownstone-style home built in 1875. Although the house is still standing, it has fallen into disrepair, and the cost of rebuilding it with the original style and quality would be extremely high. If their home were destroyed, Susan's parents would choose to rebuild a much more modest structure rather than restore it to its original state; therefore, they purchase an HO-_____ form policy to provide Replacement value or actual-cash-value protection.
Sri K.
Donna, who is single and 30 years old, has received several speeding tickets recently and was shocked by the effect on her auto insurance. Donna drives a 2002 Pontiac Firebird, is currently not covered by health insurance, has an emergency fund of $25,000, has an income of $100,000 per year, and has an investment portfolio of $230,000. She is trying to reduce the price of her auto insurance. Which of the following actions is most likely to be advisable? a) lower her liability limits to the minimum allowed in her state b) drop her medical payments coverage c) raise her deductible from $250 to $1,000 d) drop her comprehensive coverage and keep collision-only e) drop everything from her policy except the liability insurance
Manasvee S.
1. Larry and Liz are a young couple both working full time and earning about $50,000 a year. They recently purchased a house and took out a large mortgage. Since both of them work, they own two cars and are still making payments on them. Liz has major medical health insurance through her employer, but Larry's coverage is inadequate. They have no children, but they hope to start a family in about three years. Liz's employer provides disability income insurance, but Larry's does not. Analyze the need for health and disability insurance for Liz and Larry.
Akash M.
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