The contents of a building are valued at $250,000 and insured subject to 90% co-insurance for $125,000. The policy has a $5,000 deductible clause. A fire causes $90,000 damage, how much will the policy pay? OA) $45,000.00 OB) $40,000.00 OC) $85,000.00 OD) $90,000.00

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
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In settlement of a loss, an insurer recognizes the replacement cost of the property, less depreciation, by considering the
condition of the property immediately before the damage, its resale value and normal life expectancy and then pays the
loss based upon the figure so determined. What is the insurance term that best describes this?
OA) Co-insurance.
OB) Subrogation.
OC) Arbitration.
OD) Actual Cash Value.
Transcribed Image Text:In settlement of a loss, an insurer recognizes the replacement cost of the property, less depreciation, by considering the condition of the property immediately before the damage, its resale value and normal life expectancy and then pays the loss based upon the figure so determined. What is the insurance term that best describes this? OA) Co-insurance. OB) Subrogation. OC) Arbitration. OD) Actual Cash Value.
The contents of a building are valued at $250,000 and insured subject to 90% co-insurance for $125,000. The policy has
a $5,000 deductible clause. A fire causes $90,000 damage, how much will the policy pay?
OA) $45,000.00
OB) $40,000.00
OC) $85,000.00
OD) $90,000.00
Transcribed Image Text:The contents of a building are valued at $250,000 and insured subject to 90% co-insurance for $125,000. The policy has a $5,000 deductible clause. A fire causes $90,000 damage, how much will the policy pay? OA) $45,000.00 OB) $40,000.00 OC) $85,000.00 OD) $90,000.00
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