Henderson Owned a Concrete Block Building Valued at $20,000

Henderson owned a concrete block building valued at $20,000. Because it was virtually fireproof, he insured it for only $10,000 under a policy of insurance which contained an 80% co-insurance clause. Some time later, the building was damaged by fire. If the fire damage was $8,000, the insurer would only be obliged to pay one half of the loss, because Henderson had insured the building for half of its value.