Last year Joseph and Sarah Freeman bought a home with a dwelling replacement value of $250,000 and insured it (via an HO-3 policy) for $310,00. The policy reimburses for actual cash value and has a $500 deductible, standard limits for coverage C items, and no scheduled property coverage. Recently, burglars broke into the house and stole a 2-year old television set with a current replacement value of $800 and an estimated useful life of 6 years. They also took jewelry valued at $2,500 and silver flatware valued at $4,500.
If the Freeman's policy has an 80% coinsurance clause, do they have enough insurance to cover the theft?
Assuming a 50% coverage C limit, calculate how much the Freemans would receive if they filed a claim for the stolen items.
What advice would you give the Freemans about their homeowner's coverage?