An insured has an HO-3, no endorsements, with following limits: A - $70,000, B - $7,000, C - $35,000, D - $14,000. The policy has a $500 deductible ($500 deductible for windstorm/hurricane).
What is the amount payable (if any) when: "A vacation residence in North Carolina owned by the insured burned down. All the furniture, with an ACV of $5,000 was destroyed"?
$_____ is payable - $5,000 loss less $____ deductible, but the limit on property usually located at a secondary residence is limited to 10% of the Coverage C limit.
The answer is $4500 5,000 minus the deductible of $500
Why is it not $3500 minus the $500 or $3000? (10% of the c)
Thanks!
To All,
I have re-thought my answer and feel this is a poorly worded question. I am going to have this question removed from the course because I'm not sure I understand the intent of the author. I'm having a hard time figuring out if this is Coverage A or a Coverage C question.
Please pay attention to the special coverage limits for personal property as stated on page 63 of the state manual. You will probably see some of these special limits on your state exam. - Jan