medium · Certified Financial Planner Risk Management
The Lambert family owns a home with a replacement cost of $600,000. They have an HO-3 policy with Coverage A of $500,000. During a heavy rainstorm, the basement floods, and a nearby river overflows, causing $40,000 in damage.
Which of the following is the most likely outcome regarding their claim?
- The claim will be paid in full because the HO-3 is an open-perils policy on the dwelling.
- The claim will be partially paid based on the coinsurance formula because they carried more than 80% of the replacement cost.
- The claim will be denied because flood and surface water are standard exclusions in homeowners forms.
- The claim will be paid up to the $500,000 limit minus the deductible because it was a weather-related event.
Sign up free to see the explanation and track your rank →
More Certified Financial Planner Risk Management practice
- What should the planner do first?
- What is the husband's new cost basis in the property?
- The Keene household estate consists primarily of a closely h… — Does this estate qualify f
- If Mrs. Lindstrom becomes disabled and is in a combined 35% marginal tax bracket, what is
- How many total life insurance policies are required to fully fund this agreement?
- To avoid triggering a taxable lapse of a power of appointment for the beneficiary, what is
- A client, Solis, wants to implement a 'Cross-Purchase' buy-s… — How many life insurance po
- If they convert $10,000 to a Roth IRA, what amount is subject to income tax?