Question

In Area A, the insurance coverage rate for a wood frame house is 0.46%. In Area B, the insurance coverage rate for a wood frame house is 0.54%. What is the annual homeowner's insurance payment for a$65,900 wood frame house in Area B?
a. $355.86
b. $350.86
c. $345.87
d. None of the above

Answer 1

To solve for the homeowner's insurance payment for house built in Area B, we simply multiply the cost of the house with the insurance coverage rate in its decimal equivalent. From the given problem,
                               annual insurance payment = ($65,900)(0.0054)
                                           = $355.86
Thus, the answer is letter A.