Margo has a $100,000 home. She has it insured by four different insurers,each providing the following amount of coverage:
Insurer A: $10,000
Insurer B: $20,000
Insurer C: $30,000
Insurer D: $40,000.
A $20,000 loss occurs. Under a pro-rata distribution other insurance clause Company B will pay:

Question

Quizplus · Accepted Answer

Under a pro-rata distribution clause, each insurer pays a portion of the loss based on the proportion of the total coverage they provide. Insurer B provides $20,000 of the total $100,000 coverage, which is 20%. Therefore, for a $20,000 loss, Insurer B will pay 20% of $20,000, which is $4,000.

Margo Has a $100,000 Home