FIN 502 : CHAPTER 11 property, home and automobile insurance.docx
Document Summary
Property insurance: insures your physical properties home, clothing, furniture, appliances, jewellery, and so on against damage or destruction. Two ways to estimate the amount of coverage required: estimate the value of contents as some percent (usually 20%, estimate the insurance coverage for the contents by listing and value every item. Two forms of home insurance you can buy: depreciated value: value of replacement or repair for the item to the condition it was in when lost or damaged. Subtracting the price of a new item an allowance for depreciation based on the age of the item: replacement value: damaged or lost item is the cost of buying a new item of the same quality; higher premium. The lost or destroyed item must be replaced with ones of comparable quality. Inflation protection provision: automatically increases the coverage amount each year in accordance with the increase in some inflation index such as the customer price index (cpi)
