Commercial property insurance policy

A Building is insured for $200,000 with commercial property insurance policy. A policy has an 80% coinsurance clause. A building had a flood and incurred a $50,000 loss.

  • Admin
  • Oct 22, 2021
  • Commercial property insurance policy

    A Building is insured for $200,000 with commercial property insurance policy.

    A policy has an 80% coinsurance clause.

    A building had a flood and incurred a $50,000 loss.

    A replacement cost of the building at the time of the flood was $500,000.

    Show work, calculations, and small explanation

    1. What is the insurer’s liability for the loss?

    2. If the building carried a $500,000 property insurance policy whilst incurring the loss, how much would the building collect?

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