george owns a brick home that has a replacement value of $98,000. he insured it for 90% of its replacement value he lives in an area rated fire protection class 10. what is his annual policy premium?
To calculate George's annual policy premium, we need to consider three factors: the replacement value of the home, the percentage he insured it for, and the fire protection class rating.
1. Replacement Value: The replacement value of George's home is given as $98,000.
2. Insured Percentage: George insured his home for 90% of its replacement value. To find the insured amount, we multiply the replacement value by the insured percentage:
Insured amount = Replacement value x Insured percentage
= $98,000 x 0.90
= $88,200
3. Fire Protection Class Rating: George's home is in an area rated fire protection class 10. The fire protection class rating helps insurance companies determine the risk level associated with fire damage. Class 10 typically represents the least favorable rating, implying a lower level of fire protection.
Now, it's important to note that insurance companies often use additional factors, such as the homeowner's claims history, deductibles, and personal characteristics, to determine the final premium. Fire protection class rating is just one of the factors.
To find the annual policy premium, we would need specific information, such as the insurance company's rate table for a class 10 fire protection rating. This table would provide the premium rate per $100 of insured value. For example, if the rate is $0.55 per $100, the annual premium can be calculated as follows:
Annual premium = Insured amount / 100 x Premium rate
= $88,200 / 100 x $0.55
= $485.10
Without access to the specific premium rates, it is not possible to provide an accurate annual policy premium amount. Therefore, it is advisable for George to contact his insurance provider to obtain a precise quote based on his unique details and the insurance company's rate table.