An owner purchases a $100,000.00 parcel of property but only insures for $60,000.00. There is a partial loss under the policy of $30,000.00. Under the co-insurance rules, the title insurance company would be liable for the following claim:

Question

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Under co-insurance rules, the insurance company pays a proportion of the loss based on the ratio of the insured amount to the required insurance amount. Here, the owner insured 60% of the property's value ($60,000/$100,000), so the insurer covers 60% of the $30,000 loss, which is $18,000.

An Owner Purchases a $100,000