A Florida homeowner has a policy with $300,000 dwelling coverage, $225,000 personal property coverage (75% of dwelling), and a 5% hurricane deductible. If a hurricane causes $18,000 damage to the dwelling and $8,000 damage to personal property, what is the total insurance payment?
Correct Answer
A) $11,000
Hurricane deductible = $300,000 × 0.05 = $15,000. Total damage = $18,000 + $8,000 = $26,000. Since this is one hurricane event, only one deductible applies to the total loss. Insurance payment = $26,000 - $15,000 = $11,000. Option B ($26,000) fails to subtract any deductible. Option C ($10,000) appears to use an incorrect deductible calculation. Option D ($15,000) incorrectly subtracts the deductible from only the dwelling damage rather than total damage.
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