If the value of the property is $500,000, the coinsurance percentage for the property is 80%, the limit of insurance for the property is $250,000, and the deductible is $3500.Calculate the amount paid by the insurer if the amount of loss of property is $90,000.
A)$90,000
B)$52,750
C)$56,250
D)$250,000
E)$86,500

Question

Quizplus · Accepted Answer

The insurer will pay based on the coinsurance formula: (Amount of Insurance / (Value of Property * Coinsurance Percentage)) * Loss - Deductible. Here, it's ($250,000 / ($500,000 * 0.8)) * $90,000 - $3,500 = 0.625 * $90,000 - $3,500 = $56,250 - $3,500 = $52,750.

If the Value of the Property Is $500,000, the Coinsurance