Find the amount to be paid by the insurance company. Assume the policy includes an 80% coinsurance clause. Round to the nearest dollar.
-Replacement Cost of Building: $760,000
Face Value of Policy: $507,000
Amount of Loss: $57,000

Question

Quizplus · Accepted Answer

The amount to be paid by the insurance company is $47,531. This is calculated as follows:Amount of Loss x (Face Value of Policy / Replacement Cost of Building) x Coinsurance Percentage= $57,000 x ($507,000 / $760,000) x 80%= $57,000 x 0.667 x 0.8= $47,531

Find the Amount to Be Paid by the Insurance Company