Under a coinsurance provision requiring the building insured for at least 80 percent of its value, the recovery on an insured loss of $100,000 on the building with a replacement value of $500,000 that was insured for only $300,000 would be limited to ____.
A) $20,000
B) $30,000
C) $50,000
D) $75,000

Question

Quizplus · Accepted Answer

The coinsurance requirement is 80% of $500,000, which is $400,000. The building is insured for $300,000, which is 75% of the required amount. Therefore, the recovery is limited to 75% of the loss, which is $75,000.

Under a Coinsurance Provision Requiring the Building Insured for at Least