Homeowners Insurance Premium pp SECTION

Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill 10-7 Section Objective Calculate: annual homeowners insurance premium

Click to edit Master text styles Second level Third level Fourth level Fifth level 3 SECTION Copyright © Glencoe/McGraw-Hill 10-7 premium (p. 359) The amount paid to an insurance company for insurance. fire protection class (p. 359) A number assigned to property based on how safe it is from fire, used to determine the cost of insuring it. Key Words to Know

Click to edit Master text styles Second level Third level Fourth level Fifth level 4 SECTION Copyright © Glencoe/McGraw-Hill 10-7 How does an insurance company compute the amount of your premium? The Hunt to Find a Home p. 359

Click to edit Master text styles Second level Third level Fourth level Fifth level 5 SECTION Copyright © Glencoe/McGraw-Hill 10-7 The replacement value of Marcia Syke’s home is $150,000. She has insured her home for 80 percent of its replacement value. The home is of wood-frame construction and has been rated in fire protection class 4. What is the annual premium? Example 1

Click to edit Master text styles Second level Third level Fourth level Fifth level 6 SECTION Copyright © Glencoe/McGraw-Hill 10-7 Find the amount of coverage. Replacement × Insured Percent of Value of Home Replacement Value $150,000 × 80% = $120,000 Example 1 Answer: Step 1

Click to edit Master text styles Second level Third level Fourth level Fifth level 7 SECTION Copyright © Glencoe/McGraw-Hill 10-7 Find the annual premium. (See Figure 10.5 on page 359 of your textbook.) Find the column, Wood Frame. Find the Fire Protection Class 1-6 column Find the Amount of Insurance Coverage column with 120,000. Example 1 Answer: Step 2

Click to edit Master text styles Second level Third level Fourth level Fifth level 8 SECTION Copyright © Glencoe/McGraw-Hill 10-7 Follow across the column and down the row to where 120,000 and 1-6 meet. $381 Example 1 Answer: Step 2 (cont.)

Click to edit Master text styles Second level Third level Fourth level Fifth level 9 SECTION Copyright © Glencoe/McGraw-Hill 10-7 A brick home’s replacement cost is $250,000. It is insured for 100 percent. It is in an area rated fire protection class 3. What is the annual premium? Practice 1

Click to edit Master text styles Second level Third level Fourth level Fifth level 10 SECTION Copyright © Glencoe/McGraw-Hill 10-7 $737 Practice 1 Answer

Click to edit Master text styles Second level Third level Fourth level Fifth level 11 SECTION Copyright © Glencoe/McGraw-Hill 10-7 Robert Huynh has insured his $70,000 wood-frame home for 100 percent of its replacement cost. The home is located in an area rated fire protection class 6. What is the annual policy premium? What would the premium be if he owned a brick home? Practice 2

Click to edit Master text styles Second level Third level Fourth level Fifth level 12 SECTION Copyright © Glencoe/McGraw-Hill 10-7 Annual policy premium: $225 Premium for a brick home: $213 Practice 2 Answer

Homeowners Insurance Premium 10-7 END OF SECTION