Coverage A – Dwelling “Coverage A covers the dwelling on the residence premises as well as any structure attached to it… specifically excludes land” (Redja, 2011). Additionally, materials that are intended to be used to construct an covered building are covered as well. An example of a loss that would be covered under coverage A is a tree falling on a house or attached garage. Coverage B – Other Structures Unlike coverage A, coverage B covered buildings on a residence that are not attached to a dwelling. These structures must be separated by “clear space” and structures connected by a fence are covered as well (Redja, 2011). Ten percent of the coverage purchased on the dwelling applies to other structures. Finally, if the property is rented out, any damage caused by a non-tenant. An example of a situation covered by coverage B is if a shed that is not attached to the dwelling is damaged in a grass fire. Coverage C – Personal Property Any property owned, used, or borrowed is covered anywhere is the world under coverage C. Additionally, an invited guest’s items are covered. If an item is primarily kept at another residence, the coverage is 10% of coverage C or $1,000 whichever is greater (Redja, 2011). This rule does not apply if the item is moved because the primary residence is being repaired or maintenance is being performed. An example of the use of coverage C is if a firearm is damaged in a house fire. Coverage D – Loss of Use “Coverage D provides protection when the residence premises cannot be used because of a covered loss” (Redja, 2011). There are three benefits provided by coverage D: additional living expense, fair rental value, and prohibited use. Additional living expense pays for any additional living expenses if a covered loss makes the dwelling unfit to live in. Fair rental value provides payment, if the dwelling is partially rented to another tenant, for the rental value paid by the tenant. Prohibited use covers expenses in the event that the insured cannot live in the house “because of direct damage to neighboring premises from an insured peril” (Redja, 2011). A few examples that would covered under coverage D are: if a family is forced to live in a hotel until fire damage is repairs on their house and if the owner of a house is having another person paying rent and both are displaced because of tornado damage. References (11th ed.). Boston, MA: Pearson Prentice Hall. Coverage A-Dwelling: This covers the residents’ premises as well as the structure that is attached to it (Rejada, 2011). This excludes the land that it is on. The materials that are being used to build the covered building at hand is also covered under this. An example would be a big tree that falls because of a storm and falls right on the covered building like the house. Coverage B-Other Structures: The buildings that are covered under this is buildings that are not part of the dwelling (Rejada, 2011). It needs to be separated by big clear spaces and can also be separated by a fence that is on the premises. An example is a garage that goes up in flames and is not attached to the home. Coverage C-Personal Property: The property is owned, used, or even borrowed (Rejada, 2011). The property under this coverage is at a different residence then your own and is going through maintenance. An example of this would be a gun that is in the home and is ruined within a house fire. Coverage D-Loss of Use: Under this coverage you are protected when the residence of the owner is not being used because of a loss (Rejada, 2011). Three benefits to this coverage is additional living expense (pays for living expense if the dwelling is unfit to live in), fair rental value (dwelling is partially rented to another person/tenant that is when payment is provided), and even the prohibited use (it covers expenses from damages and the property cannot be lived in). Rejada, G.E. (2011). Principles of risk management and insurance (11 ed.). Boston, MA: Pearson Prentice Hall. ISBN: 97
80136117025 Part A – Liability Coverage Liability coverage “protected a covered person against a suit or claim arising out of the ownership or operation of a covered vehicle” (Redja, 2011). Most liability coverages have separate limits for the amount of personal injury and property damage coverages. Others have a single limit that does not specify separate limits, rather one lump sum limit. If the owner of the vehicle had liability insurance and accidentally destroyed a mailbox, liability insurance could cover it. However, most policies it would be better to pay that expense out of pocket if it was covered. Part B – Medical Payments Coverage “The (insurance) company will pay all reasonable medical and funeral expenses incurred by an insured for services rendered within three years from the date of the accident” (Redja, 2011). In this type of coverage, fault has no bearing on payment. The limit of payments to each insured individual involved in an accident is usually limited somewhere between $1,000 and $10,000. One interesting exclusion is bodily injury caused by nuclear weapon or radiation. An example of a covered injury would be a broken leg from a car accident. Part C – Uninsured Motorists Coverage Uninsured motorists coverage pays for bodily, and sometimes property, damage caused by a driver that does not have insurance (Rejda, 2011). This also covers damages incurred from a hit-and-run accident and damages caused by a driver whose insurance company no longer exists. Uninsured motorists coverage would pay for damages caused by a driver who does not have insurance and hits an insured person’s car. Part D – Coverage for Damage to Your Auto Part D coverage provides insurance for damages caused to an insured individual’s car or theft of the car. Under this coverage, not all of the components of the car are covered. Some electronics are excluded, such as, CD players and GPS systems. If the individual’s part D coverage includes other-than-collision loss then damage caused from missiles is covered (Redja, 2011). An example of an event that is covered under part D is rolling your car because of irresponsible driving. References (11th ed.). Boston, MA: Pearson Prentice Hall. Explain how the circular flow diagram relates to the current economic situation. Using the circular flow diagram, explain a way that your family interacts in the factor market and a way that it interacts in the products market. So what I gathered from this discussion topic is how the flow chart incorporates the household income. To be exact, how it works in my family household. I think the flow chart is explaining how a family income is distributed throughout the corporate world such as paying rent or mortgage, utilities, repairs, insurance, etc. This revenue of money flow pay employers that work for different companies then wages and profits that the household earns is produced back into the household as money is earned and the cycle continues. It’s like the circle of life aspect. In everyday life we experience the circular flow of income in our spending habits. It’s important to know how circular flow works and how it applies to your household and firms. We control our spending as well as our savings if we fully understand circular flow. There are two movements of circular flow which are income and withdrawals. Income is money coming in and withdrawals are the changes of funds going out of a circular motion. In the income and withdrawals this is called injections. Injections are usually caused by the government. References: Amacher, R, & Pate, J. (2013). Microeconomics principles and policies. Lately, my cat has not been eating the way he should. So I went to the pet store and bought him two cans of senior cat formula, for $5.59 a can. This was on sale, marked down from $7 per can. If it had been $7 a can, I might not have bought two cans, or may have looked elsewhere (online, for example) for a better deal. There weren’t that many cans left on the shelf, either.