Question

Q1. Joseph is a 40-year-old highly successful surgeon with a wife and two children. Joseph and his family live in a quiet home in a friendly neighborhood, and he and his wife each drive BMW SUV. Joseph owns a high-powered speedboat and flies his owns camping car. He is also the sole source of support for his aged mother. What kind of largest loss exposures confronting Joseph and the family? Explain the largest loss exposure of Joseph’s family?

A1. (At least two losses exposure; and inappropriate explanation will make deduction)

Q2. Jay rents a room in his house to a college student. In the event that the house is seriously damaged by a fire or other peril, what kind of loss(es), in addition to the actual cash value of the damaged home, is Jay likely to encounter?

A2. (At least one loss exposure; and inappropriate explanation will make deduction)

Q3. Piona bought a house on acre of land and paid the seller $164,000. The house has a garage, and Piona parks her Subaru sedan in the garage. The Subaru has a market vlue $7,000. Piona’s husband jeeps his collectibles at the house, and the collectibles are worth $5,500. Which of following statements concerning the maximum possible loss for Piona at her house is correct? And write the explanation of the answer.

The maximum possible loss for fire will include the house but not the Subaru sedan.

The maximum possible loss for theft will include the collectibles and the house.

The maximum possible loss for windstorm will include the sedan but not the collectibles.

The maximum possible loss for flood will include the sedan and the collectibles.

A3. The answer is ________

And the reason is:

Answer 1

Answer to Question 1 :

Joseph and his family are confronting the following loss exposure:

(i) Property Loss: Property loss is the loss that is due to a damage or depreciation in the value of a tangible assest. Given the fact that Joseph owns a house, a car and speedboat , there is a threat to individual property. The personal property losses can include theft of the car/speedboat or an accident, damage due to the house due to natural disaster.

(ii) Individual Risk: The largest risk that the family poses that the loss of life of an individual. In this scenario Joseph is the sole breadwinner for the family and also his aged mother is dependent on him. Joseph and family faces the risk of loss of Joseph's life should he die in untoward situation such as an accident, natural disaster or an illness.