Evaluating homeowner’s policy coverage. Last year, Brett and Amber Walsh bought a home with a dwelling replacement value of 250,000 and insured it (via an HO-5 policy) for 210,000. The policy...

Evaluating homeowner’s policy coverage. Last year, Brett and Amber Walsh bought a home with a dwelling replacement value of
250,000 and insured it (via an HO-5 policy) for
210,000. The policy reimburses for actual cash value and has a
500 deductible, standard limits for coverage C items, and no scheduled property. Recently, burglars broke into the house and stole a two-year-old television set with a current replacement value of
600 and an estimated useful life of eight years. They also took jewelry valued at
1,850 and silver flatware valued at
3,000.

a. If the Walsh’s policy has an 80 percent co-insurance clause, do they have enough insurance?

b. Assuming a 50 percent coverage C limit, calculate how much the Walshes would receive if they filed a claim for the stolen items.

c. What advice would you give the Walshes about their homeowner’s coverage?