FIN 502 Study Guide - Home Insurance, Mortgage Insurance, Property Insurance
Document Summary
Pure risk involves possibility of loss only. Property insurance- insures your physical properties (home, clothing, furniture, jewellery) against damages/destruction. Home insurance - protects family against risk of loss, damage, destruction of home, its related outbuildings (garage), and its contents (clothing, furniture, appliances) Covers liability to 3rd parties for injuries suffered on property. More risks covered by policy = higher premium. Contents of the home: clothes, furniture, appliances, estim val of contents list and val each item. Dep = (price allowance for dep)/ # yrs used: replacement val cost of buying new item of same quality. Req higher premium: dep val < replacement val, replacement cost policy lost/destroyed item replaced w/ new ones of compatible quality. Insured d/ not to replace/repair claim settled at dep val otherwise replace/repair to prev condition. Fair mkt val not used inclu val of land and foundation not typically destroyed. Want to insure replacement val of home structure.
