Multiple Choice (52 questions- 2.2 points per question- 114.4 total points): i.
ID: 358891 • Letter: M
Question
Multiple Choice (52 questions- 2.2 points per question- 114.4 total points): i. The Jones' home was damaged in a fire, forcing them to stay at a nearby hotel for two weeks while repairs were being done. Due to the circumstances, the Jones ate out every day, doubling the amount they would normally spend on food at home during a two-week period to $800. When the Jones filed a claim for damages under their HO-3, they ineluded the $800 cost of a· The insurer will pay the SS00 under Section I-Coverage D-Loss of use coverage b. The insurer will only compensate for additional expenses i.e. $400 plus other added c. The insurer will pay a third of the S800 under Section I-Coverage D-Loss of use d. The insurer will refuse to pay under Section 1-Coverage D- Loss of use coverage 2. What happens when a fire destroys $40,000 worth of home content to a home with a d of the content is $25,000. What would the homeowner be able to get from the insurance eating out as an expense resulting from the fire. How will the insurer respond to this claim for food? Explain. covers only additional expenses expenses under Section I-Coverage D-Loss of use coverage covers only additional expenses coverage covers only additional expenses covers only additional expenses since they spent so much money valued at $500,000, and coverage limit of $350,000? The replacement value minus deprec company for the content loss and for a total loss of the house? a. $25,000 and $400,000 b. $35,000 and $350,000 e $35,000 and $500,000 d· $25,000 and$350,000 e. $35,000 and $400 000Explanation / Answer
1-b. According to coverage D, insurance company provide the additional living expenses.In this example normal spending at food is $400 and due to damage by fire they have to spend $800.So $800-$400=$400 the additional amount insurance company will reimburse.
2-d.Content loss=Replacement value-depreciation=$25,000 and coverage limit is $350,000 the insurance company will provide.
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