Solve the problem.
-Haverty's Furniture owns a building with a replacement cost of $590,000 which is insured for $371,700 with an 80% coinsurance clause. The building has a fire loss of $20,500. How much will the insurance company pay?

Question

Quizplus · Accepted Answer

The insurance company will pay based on the coinsurance clause. The required insurance is 80% of $590,000, which is $472,000. The actual insurance is $371,700. The payment is calculated as (Actual Insurance / Required Insurance) * Loss = ($371,700 / $472,000) * $20,500 = $16,144.

Solve the Problem. -Haverty's Furniture Owns a Building with a Replacement Cost of Replacement