When Carolina’s house burned down, she lost household items worth a total of $11

Question

When Carolina’s house burned down, she lost household items worth a total of $111,000. Her house was insured for $250,000 and her homeowner’s policy provided coverage for personal belongings up to 55 percent of the insured value of the house.

Calculate how much insurance coverage Carolina’s policy provides for her personal possessions

Will Carolina be reimbursed in full for her household items?

When Carolina’s house burned down, she lost household items worth a total of $111,000. Her house was insured for $250,000 and her homeowner’s policy provided coverage for personal belongings up to 55 percent of the insured value of the house.

Explanation / Answer

Part a)

Insurance for personal belongingness = insurance for house x % of insurance for belongingness

                                                            = 250,000 x 55%

                                                            = 137,500

Part b)

Total amount of loss is lower than the amount of insurance, therefore, Carolina will get full amount of money reimbursed for her losses.

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