Riverside Storage obtains a fire insurance policy from Security Insurance Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Riverside insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. The insured can recover

Question

Quizplus · Accepted Answer

The insured can recover $200,000 because the policy covers the actual damage up to the insured amount, and since the insured amount ($320,000) is at least 80% of the value of the property ($400,000), the coinsurance clause is satisfied, allowing for full coverage of the actual damages incurred.

Riverside Storage Obtains a Fire Insurance Policy from Security Insurance