Question

.. When lightning strikes Brittany’s home during a storm, the resulting fire completely consumes the structure before firefighters are able to put it out. Brittany is fully insured by a DP-3 policy with a limit of $245,000, every bit of which is needed to rebuild her home. In addition, she receives a bill from the fire department for $650. How much is Brittany likely to receive from her insurer in response to her claim?

Answer 1

$245,000

Step-by-step explanation:

A dwelling fire policy (DP-3) covers losses to the house's structure, personal liability and loss rental income. Since it covers lost rental income, it is generally used by landlords, but anyone can get one for their house.

In this case, since the reparations will require at least $245,000, then that is the amount that Brittany should receive. She cannot receive any more because that is her policy's coverage, but shouldn't receive less either.