Case 20
Tanya, age 20, is a college student who recently purchased her first car from a friend who had financial problems. The vehicle is a high-mileage, 2004 Toyota Corolla with a current market value of $2,000. Assume you are a financial planner and Tanya asks your advice concerning the various coverages in the PAP.
a. Briefly describe the major coverages that are available in the PAP.
b. Which of the available coverages in (a) should Tanya purchase? Justify your answer.
c. Which of the available coverages in (a) should Tanya not purchase? Justify your answer.
d. Assume that Tanya purchases the PAP coverages that you have recommended. To what extent, if any, would her insurance cover the following situations?
1. Dani, Tanya’s roommate, borrows Tanya’s car with her permission and injures another motorist. Dani is at fault.
2. Tanya is driving under the influence of alcohol and is involved in an accident where another motorist is seriously injured.
3. During the football season, Tanya charges a fee to transport fans from a local bar to the football stadium. Several passengers are injured when Tanya suddenly changes lanes without signaling and hits another car.
4. Tanya drives her boyfriend’s car on a regular basis. While driving the boyfriend’s car, she is involved in an accident in which another motorist is injured. Tanya is at fault.
5. Tanya rents a car in England where she is participating in a summer study abroad program. The car is stolen from a dormitory parking lot.
e. Tanya also owns a motorcycle. To what extent, if any, does Tanya’s PAP cover the motorcycle
Case 25
Kimberly owns and operates a tennis shop in a resort area. The business is seasonal. A large part of the annual revenues are due to sales in June, July, and August. Kimberly keeps the shop open during the remaining months of the year, but the inventory carried during those months is reduced. During the summer months, the amount of inventory on hand is substantially increased. Kimberly has the business insured under the special form businessowners policy (BOP) with no endorsements attached.
a. Assume you are a risk management consultant. Identify the major loss exposures that Kimberly faces.
b. Assume that a covered loss occurs in July, which damages part of the inventory. Does the BOP provide any protection for the increase in inventory during the summer months? Explain your answer.
c. Kimberly plans to hire an additional employee during the summer months when sales are increasing. She is concerned about possible employee theft and dishonesty. Explain to Kimberly how this loss exposure can be handled under the BOP.
d. A fire damaged the building. As a result, Kimberly incurred a business income loss because the business was closed for 3 months. Is this loss covered by the BOP? Explain your answer.
e. Vandals broke an exterior glass window of the business, which caused substantial damage to the building. Is this loss covered by the BOP? Explain your answers
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- Be 6-7 pages in length, which does not include the title and reference pages, which are never a part of the content minimum requirements.
- Use Use Harvard style for citation and referencing
A minimum of 800 words for each case is required, you need to explain the concept, do all necessary calculations, and make your assessment based on the content in the chapters and real-life experience.
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