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Chapter 10 Homework
1. Most home insurance policies cover jewelry for $1,000 and silverware for $2,500 unless items are
covered with additional insurance. If $3,800 worth of jewelry and $2,800 worth of silverware were stolen
from a family, what amount of the claim would not be covered by insurance?
2. What amount would a person with actual cash value (ACV) coverage receive for two-year-old furniture
destroyed by a fire? The furniture would cost $1,000 to replace today and had an estimated life of five
years.
3. What would it cost an insurance company to replace a family’s personal property that originally cost
$28,000 if the insured has replacement insurance? The replacement costs for the items have increased 15
percent, the expected life is 4 years and the property is 2 years old.
4. For each of the following situations, what amount would the insurance company pay?
a. Wind damage of $835; the insured has a $500 deductible.
b. Theft of a stereo system worth $1,300; the insured has a $250 deductible.
c. Vandalism that does $425 of damage to a home; the insured has a $500 deductible.
5. Kurt Simmons has 50/100/15 auto insurance coverage. One evening he lost control of his vehicle,
hitting a parked car and damaging a storefront along the street. Damage to the parked car was $5,400, and
damage to the store was $12,650. What amount will the insurance company pay for the damages? What
amount will Kurt have to pay?