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4.)To determine and quantify the Bedo’s current property and liability insurance planning needs thoroughly asses the following:
a.) possible liability exposures faced by the bedos
The Bedos hold a large amount of assets in the form of personal assets and real assets such as house, automobiles, yard equipment, jewelry, collectibles, etc. The total value of the real assets is close to $366,000 on the basis of their current values. There is the risk that these assets may be stolen and the household also has home and auto loans, which can increase their liability to pay these loans even if the asset is stolen or tampered.
b.) their current level of homeowners insurance coverage compared to industry benchmarks
The current homeowners insurance of the Bedos is only $100,000 coverage under HO-3 policy. The insured value of the house is $225,000. Given the current value of $250,000 of the house, it means that the house is 90% insured. As per the industry benchmarks, 80% coinsurance is needed and so this seems sufficient at the time. However, their lack of clarity about the availability of inflation protection increases the risk since lack of inflation protection cover can expose them to penalties for less than 80% coverage....
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