Home and Automobile Insurance
Newlyweds Jamie Lee and Ross have had several milestones in the past year. They are newlyweds, recently purchased their first home and now have twins on the way!
Jamie Lee and Ross have to seriously consider their insurance needs. A family, a home and now babies on the way, they need to develop a risk management plan to help them should an unexpected event arise.
Current Financial Situation:
Assets
(Jamie Lee and Ross combined):
Checking account: $6,300
Savings Account: $23,200
Emergency Fund savings account: $30,500
IRA balance: $36,000
Car: $10,000 (Jamie Lee) and $18,000 (Ross)
Liabilities
(Jamie Lee and Ross combined):
Student loan balance: $0
Credit Card Balance: $4,000
Car Loans: $8,000
Income:
Jamie Lee: $50,000 gross income ($37,500 net income after taxes)
Ross: $75,000 gross income ($64,000 net income after taxes)
Monthly Expenses
(combined):
Mortgage: $1,252
Property Taxes and Insurance: $500
Utilities: $195
Food: $600
Gas/Maintenance: $375
Credit Card Payment: $250
Car Loan Payment: $389
Entertainment: $300
Original Purchase Price of Home
:
$293,000
- Jamie and Ross decided to conduct a check-up on their homeowner’s insurance policy. They noticed that they had omitted covering Jamie Lee’s diamond wedding band set from their policy. What if it got lost or stolen? It was a major purchase and beside the emotional value, the cost to replace the diamond jewelry would be very high. What should they do?