Question

Brian’s Toy Store building is worth $600,000.00 and is insured for $420,000.00. Assuming an 80 percent coinsurance clause and that a fire caused $170,000.00 damage, the liability of the insurance company is

$148,750.00.

$119,000.00.

$148,570.00.

$191,000.00.

Answer 1

I think it’s D $191,000.00

Answer 2

The answer is 148,750.

Explanation:

to get this, you would start by finding 80% of your property replacement value. then you would divide the actual coverage amount by that 80% that should be covered. you get 87.5%. You then multiply this by the value of the loss to get your reimbursement value, which comes out to A. 148,750