Find the amount paid by each of the multiple carriers.
-The Dixie Beer Company had an insured fire loss of $61,000. It had insurance coverage as follows: Company A, $500,000; Company B, $200,000; and Company C, $100,000. Find the amount paid by each carrier assuming that the coinsurance requirement had been met.

Question

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To find out the amount paid by each carrier, we need to first calculate the coinsurance percentage.

Coinsurance percentage = (amount of insurance carried / value of the property) x 100%

In this case, the total amount of insurance coverage is $800,000 ($500,000 + $200,000 + $100,000) and the value of the property is $61,000.

Therefore, coinsurance percentage = (800,000 / 61,000) x 100% = 1,311.48% (rounded to the nearest hundredth)

Since the coinsurance requirement has been met, each insurance carrier will pay for their proportionate share of the loss.

Company A's proportionate share:
= (amount of insurance carried by Company A / total amount of insurance coverage) x amount of loss
= ($500,000 / $800,000) x $61,000
= $38,125

Company B's proportionate share:
= (amount of insurance carried by Company B / total amount of insurance coverage) x amount of loss
= ($200,000 / $800,000) x $61,000
= $15,250

Company C's proportionate share:
= (amount of insurance carried by Company C / total amount of insurance coverage) x amount of loss
= ($100,000 / $800,000) x $61,000
= $7,625

Hence, the amount paid by each carrier is $38,125 by Company A, $15,250 by Company B, and $7,625 by Company C. Therefore, the correct choice is C. Since coinsurance requirement was met, each carrier will pay a proportionate amount of the loss based on their coverage amount.

First, we need to find the total coverage amount:

Total coverage = $500,000 + $200,000 + $100,000 = $800,000

Then, we can calculate the percentage of the loss that each carrier is responsible for:

Company A = $500,000/$800,000 x $61,000 = $38,125 
Company B = $200,000/$800,000 x $61,000 = $15,250 
Company C = $100,000/$800,000 x $61,000 = $7,625

Therefore, the amount paid by each carrier is:

Company A = $38,125 
Company B = $15,250 
Company C = $7,625

So, the answer is C, $38,125, $15,250, $7,625.

Find the Amount Paid by Each of the Multiple Carriers