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Problem 16 Your home insurance policy has a $500 deductible and provides cash value coverage on...

Problem 16

Your home insurance policy has a $500 deductible and provides cash value coverage on contents. If your home is over 25 years old and a small fire causes $16,000 damage to it, what amount of the claim would the insurance company pay? (Show your calculations)

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Answer:

Given that the home insurance policy has a $500 deductible.

Also, the damage to building is worth $16,000

=> If the claim is covered we have to pay $500 towards repairs and the insurance company would pay the remaining

($16,000 - $500) = $15,5000

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