Carl and Alexandra Purchased a $200,000 Homeowners Policy for Their

Multiple Choice

Carl and Alexandra purchased a $200,000 homeowners policy for their house in 1988.They have renewed the policy each year since and have replacement coverage.This policy has a $1,000 deductible.Their home now has a replacement value of $275,000.Last week they came home to find a small fire which caused the following damages: Assume Carl and Alexandra have a standard HO-3 policy with personal property covered at 50% and landscaping covered for 10%.How much will the insurance pay for the losses of their personal property and landscaping?

A) $15,000
B) $ 9,700
C) $24,545
D) $27,000
E) $30,000