James has his home and personal property insured under a Homeowners(special form)policy.The dwelling is insured for $120,000.The replacement cost of the home is $200,000.Indicate the extent to which each of the following losses would be covered under James's Homeowners 3 policy. (Ignore the deductible)
a. Lightning strikes the roof of the houses and severely damages it. The actual cash value of the damaged roof is $10,000 and it will cost $16,000 to replace the damaged portion.
b. A living room window is broken in a hailstrom. The drapes are water stained and must be replaced. The actual cash value of the damaged drapes is $400.Replacement cost is $600.
c. The water heater explodes and damages some household contents, The actual cash value of the damaged property is $2,000,and the cost of replacing the property is $3,200.