Part 2: Calculations Scenario 1: Homeowners Insurance John owns a house valued at $$ \$ 365,500 $$. His insurance policy costs $$ \$ 1.20 $$ per $$ \$ 100 $$ of coverage annually and also includes a liability coverage fee of $$ \$ 150 $$ per year. 1. Calculate the cost of the insurance for the structure of the house. o Formula: Cost $$ = $$ (Value of the house $$ / 100) imes $$ Cost per $$ \$ 100 $$ 2. Add the liability coverage fee to determine the total annual premium. o Total Cost $$ = $$ Cost for house + Liability fee

Question

Part 2: Calculations Scenario 1: Homeowners Insurance John owns a house valued at $$ \$ 365,500 $$. His insurance policy costs $$ \$ 1.20 $$ per $$ \$ 100 $$ of coverage annually and also includes a liability coverage fee of $$ \$ 150 $$ per year. 1. Calculate the cost of the insurance for the structure of the house. o Formula: Cost $$ = $$ (Value of the house $$ / 100) 	imes $$ Cost per $$ \$ 100 $$ 2. Add the liability coverage fee to determine the total annual premium. o Total Cost $$ = $$ Cost for house + Liability fee

UpStudy AI · Accepted Answer

Sure, let's walk through each calculation step-by-step for Scenario 1: Homeowners Insurance.

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### **1. Calculate the Cost of Insurance for the Structure of the House**

**Given:**
- **Value of the house:** \$365,500
- **Cost per \$100 of coverage:** \$1.20

**Formula:**
$$
\text{Cost} = \left( \frac{\text{Value of the house}}{100} \right) \times \text{Cost per \$100}
$$

**Calculation:**
$$
\text{Cost} = \left( \frac{365,500}{100} \right) \times 1.20
$$
$$
\text{Cost} = 3,655 \times 1.20
$$
$$
\text{Cost} = 4,386
$$

**Result:**
- **Cost of insurance for the house structure:** **\$4,386**

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### **2. Determine the Total Annual Premium by Adding the Liability Coverage Fee**

**Given:**
- **Liability coverage fee:** \$150 per year

**Formula:**
$$
\text{Total Cost} = \text{Cost for house} + \text{Liability fee}
$$

**Calculation:**
$$
\text{Total Cost} = 4,386 + 150
$$
$$
\text{Total Cost} = 4,536
$$

**Result:**
- **Total annual premium:** **\$4,536**

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### **Summary**

1. **Cost of insurance for the house structure:** \$4,386\
2. **Total annual premium (including liability fee):** \$4,536
- **Cost of insurance for the house structure:** \$4,386 - **Total annual premium (including liability fee):** \$4,536

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