A flood caused $620,000 in damages to a building owned by Super Storage Inc. The building, valued at $1,035,000, was insured for $847,000 despite a coinsurance requirement of 90% in their policy. How much of the loss will be covered by the insurance company?

Question

Quizplus · Accepted Answer

The insurance coverage is calculated using the formula: (Insurance Carried / Insurance Required) x Loss. The required insurance is 90% of the building's value, which is $931,500. The insurance carried is $847,000. Thus, the coverage is ($847,000 / $931,500) x $620,000 = $563,757.38.

A Flood Caused $620,000 in Damages to a Building Owned