Unit 4 - Lesson 2
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"?
Ans. $_____ 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.
I thought it was $3,500 which is 10% of C since the loss was at a secondary residence. However, the correct answer was $4,500 ($5,000-$500 deductible). Why?
The question is not really clear... It may be they have a policy on the North Carolina House, so it would be treated as the dwelling property?
I can see your confussion.. I am going through the 440 course, and thought a couple of the answers were wrong there also.
Let me know the answer if you find out?
The correct answer is $3,500 which is 10% of $35,000.
I interpret the question that the HO-3 is on the vacation residence (as a secondary residence) There fore: $4500 ($5000 less the $500 deductible)
If the HO-3 is not the vacation residence, then $3000 10% of C less the $500 deductible.
Sorry I didn't clarify the answer for others than the one that asked.
We just need to be concerned about the personal property and we know that is not at the property (not on the premise). So the coverage for the personal property out of the premise (anywhere in the world is 10% of Cov C = 35,000*0.10=$3,500.
Loss was 5k minus deductible $500 = 4,500 - which is more than max cov $3,500. Insurer will pay $3,500.