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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

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

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter10: Protecting Your Property
Section: Chapter Questions
Problem 1LO
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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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