Co-insurance Flashcards
1) Maxwell has an 80% co-insurance clause on his brick home. His home is valued at $300,000 and he insured it for $80,000. How much would the Pure Adrenaline Insurance company pay on a $30,000 loss?
$10,000
2) The American Pickers own a building that suffers a $200,000 lightning loss. The building is insured for $240,000. How much would be paid by the Restoration Insurance Company if there is an 80% co-ins clause, and the value of the building is $400,000?
$150,000
3) Mr. Nicely’s building is covered by a policy that has an 80% co-insurance clause. He purchased the building eleven years ago for $80,000. The building is now valued at $100,000. The building sustains wind damages in the amount of $12,000. Mr. Nicely insured the building for $60,000. His insurance company is quickly on the scene and indemnifies Tony. What amount will the helpful adjuster write the check for?
$9,000
4) Carl has a building that is valued at $300,000. It is insured for $250,000 with an 80% co-insurance clause. In the event of a $75,000 loss, how much will the policy indemnify Carl for?
Math is $250,000 divided by $300,000 time 80%. No need to go any further since the policy limit is above the required amount of coverage. The insured would be indemnified the full amount of the loss up to the limit of the policy.
5) Batman is grilling on his back patio and causes a grease fire which spreads to his bat cave/home. As a result the home sustains $60,000 in damages. Although Robin encouraged Batman to insure his home to the full value of $600,000, Batman chose to insure it for $160,000. How will the Metropolis insurance company indemnify Batman for this loss?
$20,000
