Essays on FIN444 HW WK3 Assignment

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Task: Insurance policies Introduction This work is a discussion of various insurance policies purchased by different individuals. The policies that are the foundation of this paper are HO-3, PAP, DP-1 and DP-3. The responses to the questions are provided below each question. That is. Q1a, 1b…. as done below. Q1 A: HO-3 policy is an insurance policy that provides indemnification for loss and risks to properties. The coverage provided under this policy settles claims because of physical loss to the insured dwelling place. The dwelling place is to means personal home and any other property within the insured dwelling.

However, this policy is limited to the included perils as mentioned in the policy statement. Endorsements are the additional insurance coverage that is excluded by section 1 of the H0-3 policy. On that note, Lucia and her husband should consider the following three endorsements: the inflation guard, coverage for earthquake and scheduled personal property (Mehr 237-45). Q1B: the endorsement for inflation guard would increase the coverage for A, B, C and D. Coverage A concerns temporary loss of use of dwelling place.

Payment would be made to cover for rental expenses of staying elsewhere. As a result, the overall amount of premium paid by Lucia and her husband will increase. Secondly, earthquake coverage, if included, would introduce allowance for any coverage that benefits Lucia and her husband. Lastly, the inclusion of scheduled personal property endorsement has the influence of pushing up the amount of premium paid by Lucia and her husband (Mehr 237-45). Q1C (a): section II under personal liability provides to pay for such accidents caused directly by the insured at her permanent or temporary premise.

However, the full payment of $ 60,000 will be provided because this policy has a limit of $ 100,000 (Mehr 237-45). Q1C (b): section II under personal liability provides for such coverage. Since the architecture is related to Lucia, the whole amount of the claim will be settled considering that the limit for this coverage is $ 100,000. Moreover, the amount claimed is $ 40,000 (Mehr 237-45). Q1C (c): section I will provide coverage for the claim because the damage was done by the insured and there is a provision for such claim under personal liability (Mehr 237-45). Q2 A: the following coverage is available under PAP: first, liability coverage that protects the insured against a claim and suit filed during the ownership of a covered automobile.

Second, medical payment coverage that settles medical and funeral expenses in the event of an accident in an insured vehicle. Third, uninsured motorist coverage that settles the expenses because of bodily injury caused by uninsured third party. Fourth, coverage for damage to your auto in which the insurer settles the expenses arising from accidents.

Fifth, duties after an accident, which requires a prompt report to the policy and the insurance company by the insured. Lastly, general provision provides coverage within the U. S, Canada and Puerto Rico (Mehr 157-99). Q2B: Kim should purchase liability, medical payment and uninsured motorist coverage. The reason is, Kim is still young and energetic and the college environment is full of diverse of personalities thus prone to more accidents. Kim should also consider that most students’ vehicles might not be insured. Uninsured motorist coverage would help in this case (Mehr 157-99). Q2C: Kim should avoid purchasing the following insurance policies: duties after the accident and the general provision.

The reason is, whether the insured purchases “duties after accident coverage” or not, the police and the insurance company must still be informed in case of any accident. Secondly, Kim is still a student and in the event of touring outside the U. S, he could use public means of transportation to minimize on costs (Mehr 157-99). Q2D (I): Kim’s insurance policy would cover the injured party’s claims up to the limit of the policy (Mehr 157-99).

Q2D (II): Kim’s insurer would not provide indemnification because driving while drunk is a failure of responsibility (Mehr 157-99). Q2D (III): Kim’s policy provides for exclusion of indemnification in case the insured’s vehicle is used to provide transportation service. Consequently, Kim would get no coverage for the damage (Mehr 157-99). Q2D (IV): Kim’s insurer would not settle any claim because the vehicle involved in the accident is not insured under Kim’s name (Mehr 157-99). Q2D (v): Kim’s insurance policy would not pay for the loss since the car was rented (Mehr 157-99). Q2E: Kim’s policy does not cover for the motorcycle unless she purchased a policy strictly for a motorcycle (Mehr 157-99). Q3A: Fred faces a major property and financial loss.

A property loss would be caused by the floods. In the event, he risks losing the house, the boat and his dogs and any other household property. On the other hand, the financial loss would by losing the value of the mentioned properties in the event of a flood (Mehr 242-77). Q3B: First, the section II of HO-3 provides for personal liability coverage, whereas, DP-3 and DP-1 do not provide for personal liability coverage.

Second, in DP-3 policy, the residential theft coverage is available as an endorsement whereas, HO-3 has no supplement for residential theft coverage. Lastly, HO-3 policy provides for medical coverage, whereas, both DP-1 and DP-3 do not (Mehr 242-77). Q3C: HO-3, DP-1 and DP-3 do not cover for perils caused directly or indirectly by flood. Therefore, Fred would not be compensated in the event of loss (Mehr 242-77). Q3D: Fred should purchase personal liability coverage together with DP-3 in order to reduce the risk caused by suit for damages of other people’s property and/or injuries to other people (Mehr 242-77). Q3E: Fred should purchase flood insurance in order to be compensated in the event that he loses his home to imminent flood (Mehr 242-77). Works Cited Mehr, Robert I.

Fundamentals of Insurance, Homewood, Ill: Irwin, 1986. Print.

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