The property of Vin's Garage is worth $400,000. Vin has a fire insurance policy of $160,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $180,000 of damage? If Vin met the coinsurance, how much would the insurance company pay?

Question

Quizplus · Accepted Answer

$400,000 × .8 = $320,000; $160,000 / $320,000 = .5 × $180,000 = $90,000; $180,000.

The Property of Vin's Garage Is Worth $400,000