Stoller has a building worth $100,000 and has $70,000 in property insurance with an 80 percent coinsurance clause. If she suffers a $10,000 loss, she will receive from her insurer

Question

Quizplus · Accepted Answer

The correct calculation involves the coinsurance formula: (Amount of Insurance / (Coinsurance Percentage * Value of Property)) * Loss = Claim Payment. Here, it's ($70,000 / (0.80 * $100,000)) * $10,000 = $8,750. Stoller did not meet the coinsurance requirement, so the claim payment is less than the actual loss.

Stoller Has a Building Worth $100,000 and Has $70,000 in Property