Joan's Hardware Shop is worth $40,000 and is insured for $30,000. Assuming an 80% coinsurance clause, what would the insurance company pay if a fire caused $20,000 of damage to the shop?

Name: Joan's Hardware Shop is worth $40,000 and is insured for $30,000. Assuming an 80% coinsurance clause, what would the insurance company pay if a fire caused $20,000 of damage to the shop?
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Quizplus · Accepted Answer

$40,000 × .8 = $32,000; $30,000 / $32,000 × $20,000 = .9375 × $20,000 = $18,750.

Joan's Hardware Shop Is Worth $40,000 and Is Insured for $30,000