Property Insurance 6 4 Property Owners Insurance Premiums

Property Insurance 6. 4

Property Owners Insurance Premiums �Terms to know: �Homeowner Insurance �Dwelling �Other Structures �Personal Property �Additional Living Expense �Personal Liability �Medical Payments to Others �Replacement Cost Policies �Insurance Premium

Insurance Premium (Example) �You insure your house for $89, 000 at an annual rate of $0. 51 per $100. 1. Find the number of $100 units in the insured amount $89, 000/$100 = 890 (# of $100 units) 2. # of $100 units x rate = premium (round to nearest $) 890 x $0. 51 = $453. 90 = $454

Insurance Premium (A) �You insure your house for $61, 000 at an annual rate of $0. 46 per $100. 1. Find the number of $100 units in the insured amount $61, 000/$100 = 610 (# of $100 units) 2. # of $100 units x rate = premium (round to nearest $) 610 x $0. 46 = $280. 60 = $281

Insurance Premium (B) �You insure your house for $43, 000 at an annual rate of $0. 74 per $100. 1. Find the number of $100 units in the insured amount $43, 000/$100 = 430 (# of $100 units) 2. # of $100 units x rate = premium (round to nearest $) 430 x $0. 74 = $318. 20= $318

Renters Insurance Premiums �Renters Policy �Example…. (page 244) �Check your understanding ( page 244 -245)

Collecting on Insurance Claims �Terms/Formulas to know: �Deductible �Filing a claim �Adjuster �Face value �Coinsurance Policy �Amount paid by insurance company = (Face value/Required Amount of Coinsurance) x Loss

Collecting on Insurance Claims (Example) �The Face value of your policy is $30, 000 with a $1, 000 deductible. If your loss was $7, 800 how much would you receive from the insurance company? �Loss – Deductible = Amount insurance company pays �$7, 800 - $1, 000 = $6, 800

Collecting on Insurance Claims (E) �The Face value of your policy is $18, 000 with a $250 deductible. If your loss was $10, 200 how much would you receive from the insurance company? �Loss – Deductible = Amount insurance company pays �$10, 200 - $250 = $9, 950

Collecting on Insurance Claims (F) �The Face value of your policy is $70, 000 with a $500 deductible. If your loss was $82, 000 how much would you receive from the insurance company? �Loss – Deductible = Amount insurance company pays �$70, 000 - $500 = $69, 500

Collecting on Insurance Claims (Example 2) �Building value of $50, 000 is insured for $24, 000 under an 80% coinsurance policy. The building had damages of $7, 200. What amount did the insurance company pay? �Value x coinsurance % = required amount of coinsurance $50, 000 x 80% = $40, 000 �Amount paid by insurance company = (Face value/Required Amount of Coinsurance) x Loss ($24, 000/$40, 000) x $7, 200 = $4, 320

Collecting on Insurance Claims (G) �Building value of $65, 000 is insured for $41, 600 under an 80% coinsurance policy. The building had damages of $4, 000. What amount did the insurance company pay? �Value x coinsurance % = required amount of coinsurance $65, 000 x 80% = $52, 000 �Amount paid by insurance company = (Face value/Required Amount of Coinsurance) x Loss ($41, 600/$52, 000) x $4, 000 = $3, 200

Collecting on Insurance Claims (H) �Building value of $90, 000 is insured for $46, 800 under an 80% coinsurance policy. The building had damages of $42, 000. What amount did the insurance company pay? �Value x coinsurance % = required amount of coinsurance $90, 000 x 80% = $72, 000 �Amount paid by insurance company = (Face value/Required Amount of Coinsurance) x Loss ($46, 800/$72, 000) x $42, 000 = $27, 300