1.A house worth $250,000 has an coinsurance clause of 90 percent. The owners insure the property for $191,250. They then have a fire that causes $80,000 in damage. How much money will they receive from insurance?
2.A house worth $180,000 has a coinsurance clause of 75 percent. The owners insure the property for $101,250. They then have a loss that results in a $50,000 claim. How much money will they receive from insurance?
1. Multiply the value of the house by the percent:
250,000 x 0.9 = 225,000
Divide the amount the owner insured by the clause amount:
191,250/225,000 = 0.85
Multiply that by the amount of damage:
0.85 x 80,000 = 68,000
They will receive $68,000
2. Follow the same steps as above:
180,000 x 0.75 = 135,000
101,250 / 135,000 = 0.75
0.75 x 50,000 = 37,500
They will receive $37,500
Answer:
1. They will receive $72,000 in insurance.
2. They will receive $37,500 in insurance.
Step-by-step explanation:
1.Given that the coinsurance is 90 percent.
For the fire that caused a $80,000 in damage, 90 percent of $80,000 will be received in insurance.
90 percent of $80,000 will be received in insurance
90 percent of $80,000 = 0.9 * 80000
= 72,000
Therefore, they will receive $72,000 in insurance
2. The coinsurance is 75 percent, given that they have a loss that results in a $50,000 claim.
they will received 75 percent of $50,000
75 percent of $50,000 = 0.75 * 50000
= 37.500
Therefore, they will receive $37,500