Abigail Contemplates a New Homeowner's Insurance Policy
Abigail Elizabeth Proctor of Bedford, Oregon, recently bought a home for $200,000. The previous owner had a $160,000 HO-1 policy on the property, and Abigail can simply pay the premiums to keep the same coverage in effect. Her insurance agent called her and cautioned that she would be better off to upgrade the policy to an HO-2 or HO-3 policy. Abigail has turned to you for advice. Use the information in Table 10.2 to advise her.
(a) What additional property protection would Abigail have if she purchased an HO-2 policy?
(b) What additional property protection would Abigail have if she purchased an HO-3 policy?
(c) What property protection would remain largely the same whether Abigail had an HO-1, HO-2, or HO-3 policy?
(d) Advise Abigail on what differences in liability protection, if any, exist among the three policies.