Calculations:

Right answer:

Coverage C: $12,000 - $500 = $11,500, which is greater than the $2,000 limit

Coverage A: $32,000 - $12,000 = $20,000, no limit

Coverage D: $2,400

Indemnity = coverage C + coverage A + coverage D

$2,000 + $20,000 + $2,400 = $24,400

Distractor a) $20,000 + $2,400 + $2,000 - $500 = $23,900, due to an incorrect application of the deductible

Distractor c) $32,000 + $2,400 - $500 = $33,900, due to forgetting the limit on the instruments

Distractor d) $32,000 + $2,400 = $34,400, due to forgetting the limit on the instruments and due to the deductible

The deductible is applied to the amount of the loss that is subject to a limit (the instruments), before the limit itself is applied, so as not to penalize the insured. The indemnity for the musical instruments will therefore be $2,000, because coverage for them is limited to that amount by special limit f of coverage C.

Moreover, the amount of the damage related to the tenant’s improvements (coverage A) is $20,000, namely, $32,000 (total damage) – $12,000 (damage to the instruments) = $20,000. The additional living expenses amount to $2,400 (coverage D).

The various types of damage must be distinguished before calculating the amount to be paid as an indemnity, because of the applicable limits and the different coverages involved.

There are no applicable limits on coverages A and D.

Reference in Manual F511, 2^nd edition 2014:

Tome 1, pages 243-244, 312-313 and 363-376, sections 4.9.1.2 - L’application de la franchise en présence de limitations particulières, 5.6.3 - Les limitations particulières, 5.6.4 - Les frais de subsistance supplémentaires et la valeur locative and 6.1 - Compléter l’enquête en analysant les informations obtenues pour se prononcer quant à la recevabilité et à l’admissibilité d’une réclamation

Recueil de formulaires: pages 247-253, 255 and 265 - BAC 1511 Copropriétaire occupant – Formule tous risques (2011)

Classification in the evaluation table for skill 05-511:

Subsection 2.2: Complete the investigation and analyze the information gathered to determine whether the claim is legitimate and eligible.

Settle personal property insurance claims based on the client’s coverage

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