Case Study: Carl and Beverly McDermott own a home that is covered under an unendorsed ISO HO-3 policy

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RMI450 Week 5Case Study (0-39 points)

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Grading Rubric

Instructions

• Read the Mini-Case Study Backgrounds then respond to the questions provided.
• Refer to the Backgrounds as necessary to ensure your question responses are accurate.
• Review the Rubric above to understand what a Proficient response includes.

Mini-Case Study Background

Carl and Beverly McDermott own a home that is covered under an unendorsed ISO HO-3 policy.  The following limits and deductibles apply:

Section I Coverage A                      $450,000

Section I Deductible                        $1,500

Section II Coverage E                      $500,000

Section II Coverage F                      $5,000

Question 1

A television with an ACV of $400 is stolen from the dormitory room of Beverly and Carl’s daughter who lives on campus while attending college.

Assume that the limit on the policy meets the 80 percent loss settlement requirement.  Determine whether or not the HO-3 policy applies.

If the policy does not apply, explain why not.

If the policy does apply, for each question situation include an explanation of how you arrived at any amount(s) payable; including:

• applicable coverage(s)
• limit(s)
• deductible(s)

[Replace this text with your response.]

Question 2

A strong windstorm causes damage to the roof and several windows in the home, causing it to be uninhabitable.  The McDermott’s must live in a motel for one month and incur $1,500 in living expenses.  Their normal living expenses are $850.

Assume that the limit on the policy meets the 80 percent loss settlement requirement.  Determine whether or not the HO-3 policy applies.

If the policy does not apply, explain why not.

If the policy does apply, for each question situation include an explanation of how you arrived at any amount(s) payable; including:

• applicable coverage(s)
• limit(s)
• deductible(s)

[Replace this text with your response.]

Question 3

While both Carl and Beverly were away from home, the house is broken into and these items are stolen: (1) a diamond watch valued at $1,700, (2) cash in the amount of $350, (3) the components for a surround-sound system, including a flat-screen television, with a total ACV of $1,895 and a replacement cost value of $3,450, and (4) an emerald ring valued at $950.

Assume that the limit on the policy meets the 80 percent loss settlement requirement.  Determine whether or not the HO-3 policy applies.

If the policy does not apply, explain why not.

If the policy does apply, for each question situation include an explanation of how you arrived at any amount(s) payable; including:

• applicable coverage(s)
• limit(s)
• deductible(s)

[Replace this text with your response.]

Question 4

During a minor earthquake, crystal stemware and other glassware worth $2,000 are destroyed.

Assume that the limit on the policy meets the 80 percent loss settlement requirement.  Determine whether or not the HO-3 policy applies.

If the policy does not apply, explain why not.

If the policy does apply, for each question situation include an explanation of how you arrived at any amount(s) payable; including:

• applicable coverage(s)
• limit(s)
• deductible(s)

[Replace this text with your response.]

Question 5

Ed, a guest attending a dinner party at the home, slipped on the walkway to the front door when arriving. He broke his ankle and incurred medical expenses in the amount of $8,780.

Assume that the limit on the policy meets the 80 percent loss settlement requirement.  Determine whether or not the HO-3 policy applies.

If the policy does not apply, explain why not.

If the policy does apply, for each question situation include an explanation of how you arrived at any amount(s) payable; including:

• applicable coverage(s)
• limit(s)
• deductible(s)

[Replace this text with your response.]

Question 6

Beverly regularly provides childcare in the home for three children, five days a week.  One of the children fell from a swing set at the home and was injured while in Beverly’s care.

Assume that the limit on the policy meets the 80 percent loss settlement requirement.  Determine whether or not the HO-3 policy applies.

If the policy does not apply, explain why not.

If the policy does apply, for each question situation include an explanation of how you arrived at any amount(s) payable; including:

• applicable coverage(s)
• limit(s)
• deductible(s)

[Replace this text with your response.]

Question 7

Beverly regularly provides childcare in the home for three children, five days a week.  One of the children fell from a swing set at the home and was injured while in Beverly’s care.

Assume that the limit on the policy meets the 80 percent loss settlement requirement.  Determine whether or not the HO-3 policy applies.

If the policy does not apply, explain why not.

If the policy does apply, for each question situation include an explanation of how you arrived at any amount(s) payable; including:

• applicable coverage(s)
• limit(s)
• deductible(s)

[Replace this text with your response.]

Solution:

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