The Thomson's house burned to the ground! They felt they were adequately covered (see coverage below).Their car (market value $10,000)was in the garage and totally destroyed.How much will they be reimbursed for their auto from their HO-3 policy?

Question

Quizplus · Accepted Answer

The HO-3 policy provides coverage for property that is within the described location on the policy. Since the car was not in use and was in the garage at the time of the fire, it is considered part of the property within the described location and therefore covered under the policy. However, the policy only provides coverage for the actual cash value (market value) of the car at the time of the loss, which is $10,000. Since the car was totally destroyed, the reimbursement would be the actual cash value minus the deductible. However, the question does not provide information on the deductible, so we cannot calculate the exact reimbursement. Therefore, the best choice is A, which indicates that they will not be reimbursed for their auto from their HO-3 policy.

The Thomson's House Burned to the Ground! They Felt They