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Problem 10-12 Determining What Amount the Insurance Company will Pay for the Damages [LO10-3] Eric...

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Problem 10-12 Determining What Amount the Insurance Company will Pay for the Damages [LO10-3] Eric and Susan just purchased their first home, which cost $154,000. They purchased a homeowner's policy to insure the home for $144,000 and personal property for $87,000. They declined any coverage for additional living expenses. The deductible for the policy is $500. Soon after Eric and Susan moved into their new home, a strong windstorm caused damage to their roof. They reported the roof damage to be $23,000. While the roof was under repair, the couple had to live in a nearby hotel for three days. The hotel bill amounted to $560. Assuming the insurance company settles claims using the replacement value method, what amount will the insurance company pay for the damages to the roof

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