Question

Darrell Frazier owns a home that has a replacement value of $87,500. He purchased a homeowner’s policy for 80 percent of the house’s replacement value. The home is of brick construction and is rated in fire protection class 3. Using the table below, what is his annual insurance premium?

Answer 1

Answer:

According to the table, the type of construction and the fire protection class, Darrell will pay US$ 213 for the annual insurance premium.

Step-by-step explanation:

Let's check and use the information given to solve the question:

Replacement value of Darrell's home = US$ 87,500

Value of the homeowner's policy = 80% of Darrell's house

Type of Darrell's home construction = Brick

Fire protection class = 3

Let's find the exact amount of the insurance coverage:

Amount of insurance coverage = 80% of Darrell's house

Amount of insurance coverage = 80% * 87,500

Amount of insurance coverage = 0.8 * 87,500

Amount of insurance coverage = 70,000

The amount of insurance coverage is US$ 70,000

According to the table, the type of construction and the fire protection class, Darrell will pay US$ 213 for the annual premium.