A flood caused $602,000 in damages to a building owned by Garcia Engineering. The building, valued at $915,000, was insured for $686,000 despite a coinsurance requirement of 90% in their policy. How much of the loss will be covered by the insurance company? (Round your answer to the nearest cent)

Question

Quizplus · Accepted Answer

The insurance coverage is calculated based on the coinsurance formula: (Amount of Insurance / (Value of Property * Coinsurance Requirement)) * Loss. Here, it's ($686,000 / ($915,000 * 0.90)) * $602,000 = $501,483.91.

A Flood Caused $602,000 in Damages to a Building Owned