On April 2,1987,Ritz Corp.purchased a warehouse that it insured for $500,000.The policy contained a 75% coinsurance clause.On April 25,1988,a fire caused $900,000 damage to the warehouse.The fair market value of the warehouse was $800,000 on April 2,1987,and $1 million on April 25,1988.Ritz is entitled to receive insurance proceeds of,at most,

Question

Quizplus · Accepted Answer

The policy required at 75 percent coinsurance clause.However,since the insured amount is less than that,Ritz can claim only the insured amount.