1. Insurance & Other Housing Costs
Lesson 22

2. Homeowners Insurance
22a

3. Homeowners insurance is designed to protect the owner from fire, theft, and personal liability.
Amt. of coverage on home
Amount
Of = Coverage
* Percent

4. Total Coverage = 95,000(.80) = $76,000 Personal Prop. = 76,000(.50) =
The replacement value of a house is estimated at $95,000 it is insured for 80% of its replacement value. Use table in your notes, to find the total amount of coverage and amount of coverage on personal property, loss of use, and garage and other structures.
Total Coverage =
95,000(.80) =
$76,000
Personal Prop. =
76,000(.50) =
$38,000
Loss of Use =
76,000(.20) =
$15,200
Garage/Structures =
76,000(.10) =
$7,600

5. Total Coverage = 105,000(.80) = $84,000 Personal Prop. = 84,000(.50) =
The replacement value of a house is estimated at $105,000 it is insured for 80% of its replacement value. Use pg. 357 to find the total amount of coverage and amount of coverage on personal property, loss of use, and garage and other structures.
Total Coverage =
105,000(.80) =
$84,000
Personal Prop. =
84,000(.50) =
$42,000
Loss of Use =
84,000(.20) =
$15,800
Garage/Structures =
84,000(.10) =
$8,400

6. Premiums differ for insurance coverage vary depending on location
Premiums differ for insurance coverage vary depending on location. Your homeowners policy premium is the amount you have to pay for insurance coverage.
The home will be given a number that indicates how fire resistant the house is and how close it is to a water source. This is the fire protection class.

7. Step 1: Amount of Coverage 150,000(.80) = $120,000
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 word-frame construction and has been rated in fire protection class 4. What is the annual premium?
Step 1: Amount of Coverage
150,000(.80) =
$120,000
Step 2: Annual Premium
(Table Value)
$38100

8. Other Housing Costs
22b

9. There are a lot of other costs associated with houses
There are a lot of other costs associated with houses. Utilities are the main thing.
Housing costs should be no more than 35% of the owners take-home pay for the month.

10. + 918.66 Total Expenses = $918.66 Recommended Housing = 2,545(.35)
If your monthly take home is $2,545. Find if the housing costs are 35% or less for the month.
Housing costs for Oct.
Mortgage Payment
$523.90
Insurance
$20.00
Real Estate Taxes
$115.87
Electricity
$42.59
Gas Heat
$50.36
Water
$30.45
Cell Phone
$75.50
Dish TV
$59.99
Total Expenses = $918.66
Recommended Housing
= 2,545(.35)
= $890.75
Expenses are more or less than recommended? +
= –
918.66
$27.91 more than recommended

11. + 999.41 Total Expenses = $999.41 Recommended Housing = 2,177(.35)
If your monthly take home is $2,177. Find if the housing costs are 35% or less for the month.
Housing costs for Nov.
Mortgage Payment
$645.75
Insurance
$25.00
Real Estate Taxes
$108.57
Electricity
$36.52
Gas Heat
$55.61
Water
$28.47
Cell Phone
$50.00
Dish TV
$49.49
Total Expenses = $999.41
Recommended Housing
= 2,177(.35)
= $761.95
Expenses are more or less than recommended?
= – +
$ more than recommended
999.41

12. 22: Insurance & Other Housing Costs
Questions?
Summarize your notes
Homework
Worksheet
Quiz