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8 August, 18:19

A lot is valued at $25,000, and the house is valued at $75,000. If the house is totally destroyed by fire, under a guaranteed replacement cost policy with a coinsurance clause, which of these would MOST likely occur? a. The insurance company would pay $100,000 to the owner. b. The insurance company would pay $75,000 to the owner. c. The insurance company would pay $60,000 to the owner. d. The insurance company would pay $80,000 to the owner.

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  1. 8 August, 19:31
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    Option D is correct

    Explanation:

    Co insurance cost is paying 80% of market value of damaged house including property because it is a guaranteed replacement cost policy.

    (80/100) * (25000 + 75000) = 80000
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