Greenfield purchased a building ten years ago for $400,000. Since then, the company has maintained the same $400,000 building limit on its commercial property insurance policy. This policy has an 80 percent co-insurance clause and a $10,000 deductible. Recently Greenfield had a tornado claim for $330,000 in damages to the building. When the insurance company adjuster examined the property she discovered the building had an Actual Cash Value of $600,000. Which of the following payments is the insurer likely to make to Greenfield?
Greenfield purchased a building ten years ago for $400,000. Since then, the company has maintained the same $400,000 building limit on its commercial property insurance policy. This policy has an 80 percent co-insurance clause and a $10,000 deductible. Recently Greenfield had a tornado claim for $330,000 in damages to the building. When the insurance company adjuster examined the property she discovered the building had an Actual Cash Value of $600,000. Which of the following payments is the insurer likely to make to Greenfield?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
1.
Greenfield purchased a building ten years ago for $400,000. Since then, the company has maintained the same $400,000 building limit on its commercial property insurance policy. This policy has an 80 percent co-insurance clause and a $10,000 deductible. Recently Greenfield had a tornado claim for $330,000 in damages to the building. When the insurance company adjuster examined the property she discovered the building had an Actual Cash Value of $600,000. Which of the following payments is the insurer likely to make to Greenfield?
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a. $330,000 |
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b. $320,000 |
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c. $310,000 |
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d. $265,000 |
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e. $216,875 |
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