Question 1

The owner of property valued at $140,000 insured the property for $90,000 for one year at a premium rate of $4.80 per thousand. The policy contained a 90% coinsurance clause. A fire caused $63,000 in damage. How much more did the insurance company pay the property owner for repairs for fire damage than the property owner paid the insurance company in premiums that year?​

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Question 2

Property valued at $3,800,000 was insured for $3,100,000. The policy contained an 80% coinsurance clause. A fire caused $215,500 in damages. Compute the amount the property owner must pay if the property is repaired for $215,500.

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Question 3

Property valued at $140,000 was insured for $90,000. The policy contained an 80% coinsurance clause. A fire caused $56,000 in damages. Compute the amount the insurance company paid for repairs.

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Question 4

Martin Insurance Company issued insurance policies on buildings A and B in the same area for one year at a premium rate of $5.50 per thousand. Building A was insured for $75,000. Building B was insured for $83,000. Martin Insurance Company had a short-rate refund policy based on a penalty of 10% of the annual premium. At the end of the second month, building A was sold and the policy canceled by the building owner. At the end of the sixth month, Martin Insurance Company canceled the insurance on building B. Compute the amount Martin Insurance Company earned altogether by insuring buildings A and B.

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Question 5

Property valued at $200,000 was insured for $140,000. The policy contained a 60% coinsurance clause. A fire caused $150,000 in damages. Compute the amount the property owner must pay if the property is repaired for $150,000.

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Question 6

Davis Insurance Company insured Driver Ashley's two cars at annual premiums of $3,400 for car A and $2,440 for car B. Ashley sold both cars after six months and canceled the insurance. The insurance company refunded the remaining six months' premiums at the short rate based on a 15% penalty. Compute the amount of the total refund.​

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Question 7

The Faulkner Company building was valued at $450,000. The building was insured for $400,000. The policy contains an 80% coinsurance clause. A fire caused damages of $260,000. Compute the amount the insurance company paid for damages.​

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Question 8

The Jordan Company building was valued at $400,000. The building was insured for $200,000. The policy contained an 80% coinsurance clause. A fire caused $180,000 in damages. Compute the amount of the fire damage the Jordan Company had to pay.​

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Question 9

Insured A, age 27, purchased a $35,000, 20-payment life policy with premiums payable annually. Insured B, also age 27, purchased a $35,000 straight-life policy with premiums payable semiannually. Both A and B lived 40 more years. How much more in premiums did insured B pay the insurance company during his lifetime than insured A paid during hers? Refer to Table 12-1. (1 year = 12 months.)​

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Question 10

The Green Company building was valued at $220,000. The building was insured for $100,000 at a premium rate of $5.60 per thousand. The policy contained an 80% coinsurance clause. A small fire caused damages costing $35,200 to repair. Later in the year, another fire caused damages costing $105,600 to repair. How much more did the insurance company pay for repairs for fire damage for Green Company during the year than it earned in premiums from the Green Company for the year?

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Question 11

An insured 28 year old purchased a $100,000, 20-payment life policy with premiums payable annually and lived 20 more years. How much more did the insured pay the insurance company in premiums during his lifetime than he would have paid for a $100,000 straight-life policy with premiums payable annually? Refer to Table 12-1. (1 year = 12 months.)​

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Question 12

An insurance company has a standard coinsurance clause of 90%. Compute the amount of insurance coverage the owner of a building valued at $1,060,000 must carry in order to avoid being the bearer of part of the insurance.​

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Question 13

The Jordan Appliance Company has two buildings. Building A is valued at $95,000 and is covered by a $60,000 insurance policy with an 80% coinsurance clause. Building B is also valued at $95,000 and is covered by a $50,000 insurance policy with a 75% coinsurance clause. Both buildings burned to the ground. Compute the amount of insurance money Jordan Appliance Company collected altogether for fire damages.

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Question 14

Harrington Insurance Company insures four moving vans for National Moving Company. Annual premiums for the four trucks are: Truck A = $3,480; Truck B = $3,360; Truck C = $2,640; and Truck D = $4,100. Harrington Insurance Company charges a short-rate penalty of 15%. At the end of the second month, National Moving Company sold trucks A and B and canceled their insurance. At the end of the fourth month, National Moving Company sold truck C and canceled its insurance. Compute the amount National Moving Company paid Harrington Insurance Company for insurance during the year.

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Question 15

Property valued at $172,000 was insured for $100,000. The policy contained a 90% coinsurance clause. A fire caused $77,400 in damages. Compute the amount the insurance company paid for repairs.

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Question 16

The Morgan Company warehouse was valued at $2,400,000. The building was insured for $960,000. The policy contained an 80% coinsurance clause. A fire caused $660,000 in damages. Compute the amount the Morgan Company recovered from the insurance company for fire damage.

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Question 17

Insurance Company A has a standard 90% coinsurance clause for all fire insurance coverage. Insurance Company B has a standard 75% coinsurance clause for all fire insurance coverage. A building is valued at $195,000. How much more insurance coverage would Insurance Company A require than Insurance Company B for full coinsurance coverage?

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Question 18

The owner of property valued at $150,000 insured the property for $75,000 for one year at a premium rate of $4.90 per thousand. The policy carried a 75% coinsurance clause. A fire caused $56,250 in damages. Compute the amount the property insurance and repairs for fire damage cost the insured that year.​

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Question 19

Property valued at $150,000 was insured for $100,000. The policy contained a 60% coinsurance clause. A fire caused $45,000 in damages. Compute the amount the insurance company paid for repairs.

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Question 20

A client, age 26, is planning to purchase a $100,000, 20-payment life policy and is deciding whether to pay quarterly or semiannually. Compute the amount the client would save during her lifetime by choosing semiannual payments. Refer to Table 12-1. (1 year = 12 months.)

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Quiz 12: Insurance