An $80,000 fire insurance policy covers a building, which is valued at $100,000, and there is an 80% co-insurance clause.If the building is totally destroyed by fire, the policyholder will receive:
A)$80,000.
B)$100,000.
C)$20,000
D)$64,000

Question

Quizplus · Accepted Answer

The policyholder will receive $80,000 because the insurance policy covers up to that amount, and the building is totally destroyed. The co-insurance clause does not affect the payout in the case of total loss when the policy limit is reached.

An $80,000 Fire Insurance Policy Covers a Building, Which Is