Find the amount paid by each of the multiple carriers.
-The Acme Tire Company had an insured fire loss of $2,292,000. It had insurance coverage as follows: Company A, $2,000,000; Company B, $1,500,000; and Company C, $500,000. Find the amount paid by each carrier assuming that the coinsurance requirement had been met.

Question

Quizplus · Accepted Answer

Since the coinsurance requirement has been met, we can assume that each carrier is responsible for paying for their own coverage limit. 
Company A paid the full $2,000,000 of their coverage limit. 
Company B would pay for the first $292,000 ($2,292,000 - $2,000,000), then pay for $1,208,000 ($1,500,000 - $292,000) of their coverage limit. 
Company C would pay for the first $292,000, then pay for $208,000 ($500,000 - $292,000) of their coverage limit. 
Thus, Company A pays $2,000,000, Company B pays $1,208,000, and Company C pays $286,500, for a total of $3,494,500. 
Therefore, the answer is C.

Find the Amount Paid by Each of the Multiple Carriers