A. You are insuring a dwelling with a replacement value of $180,000. It\'s prese

Question

A. You are insuring a dwelling with a replacement value of $180,000. It's presently insuredfor$145,800. The policy contains a 90% coinsurance clause. Recent wind-storm damage totaled $7,000. $1,000 deductible. How much will you recoveron the dwelling? B. As a result of the damage, includingbroken windows, thievesapparently made offwith silverware valued at $2,200 and jewelry worth $600. A home entertainment system was ruined by water damage. It cost $3,200 six years ago, hasa depreciated life of eightyears, and hasa current replacement cost of $2,600. (Note: $1,000 deductible already incurred in partA). How much will you recoveron personal property? ScheduleC limits: Jewelry $1,000, Silverware $2,500

Explanation / Answer

Home entertainment system as declined from $3200 to $2600 in 6 years implying a depreciation of $100 per year. So after its lifetime of 8 years, the salvage value should be $2400.

Hence total recovery on personal property = 2200 + 600 + 2400 - 1000 = $5100  

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