4.

0 HOME AND AUTOMOBILE INSURANCE

1. Eloli and Murni bought their first home for RM130,000. They also purchased
homeowner’s policy and personal property policy for RM120,000 and RM75,000 respectively.
The deductible for this coverage is RM500.

The amount you have to pay in the event of a claim is an insurance deduction. A
deduction is if your policy covers the loss, your insurance will then start covering the remainder.
For instance, if your policy allowance amounts to RM1,000 and you have a RM10,000 loss in
accordance with your policies, you will pay RM1,000 and take care of the remaining RM9,000
from your insurer [ CITATION Son19 \l 1033 ].

When their house roof damage due to the windstorm, the insurance company agreed to
settle claims using replacement value method.

Replacement value is a means of assessing what an insurance provider will compensate

you for theft or destruction of your stuff. The cost to replace the property is equal [CITATION
Ins \l 1033 ].

In this example, the house property is the roof. A RM17,000 roof damage has been
recorded, and roof damage insurance may be claimed. The couple does not have insurance to
cover their living expenditures. As a result, the RM320 in hotel living expenses will not be
reimbursed by insurance. As a result, the couple is unable to claim the hotel living costs.

The calculation for the insurance claim will be as follows:

Claim amount = Roof damage – Deductible

= RM17,000 – RM500

= RM16,500

Therefore, the amount Eloi and Murni can claim from the insurance company is RM16,500 for
roof damage.
2. The insurance company will only pay RM15,000 to Murni for the car accident. This is
because the limit coverage for the insurance policy is 50/100/15. Under the property damage it
includes the parked car, and the store falls that made by Murni’s because she lost her control of
her car itself. For the first number 50 represents RM50,000. It is the overall body damage
liability compensation for one person get in accident or injured. Next, the second number 100
represent for RM100,000. This amount is the maximum that Murni’s can get from the the
insurance coverage for liability for bodily injury to all injured persons in one accident. Finally,
the third number 15 stands for RM15,000. It means the whole share of the blame for any
indirect damaged produced by a accident. The cost of the property damage from the Murni’s
car accident is RM19,700. Where RM4,300 for damage to the parked car and RM15,400 for the
damage to the store. As a result, the insurance company will pay the policy limit of RM15,000,
while Murni will be responsible for RM4,700.

References
Insureon, BIN Insurance Holdings Agency. (n.d.). Replacement value. Retrieved from Insureon:
https://www.insureon.com/insurance-glossary/replacement-value

Sonnet. (2019, July 23). What is a deductible? Retrieved from Sonnet Blog:
https://www.sonnet.ca/blog/what-is-a-deductible