Insurer A's coverage is 75% (75000/(75000+25000)) of the total of all coverage, and therefore will pay 75% of the loss.
Insurer A ill pay = 75%*20000 = $15000
Key Concepts 6.9 Homework. Unanswered An individual has two property insurance policies in force on property...
Chapter 6, Review Questions 1 Homework. Unanswered A property insurance policy is written with a 90 percent coinsurance clause and a policy limit of $45,000. The actual replacement cost of the structure, less depreciation, is found to be $100,000. What amount may be collected under this policy in the event of a $50,000 loss? Numeric Answer:
DEX, Inc. has flucuating inventory levels. It has opted to provide its insurer with a monthly value reporting form to document its monthly inventory values for premium calculation purposes. Assume for its last report DEX purposely underreported its inventory values as $75,000 instead of the true $100,000 so that it would have a smaller premium payment at the end of the year. One week after submitting its report, DEX suffered a fire loss to its inventory valued at $20,000. This...
Insurance coverage relies on 1. the law of large numbers, meaning Events that are statistically difficult to predict for a specific individual are more predictable for a large number of individuals b. Events that are statistically difficult to predict for a large number of individuals a. predictable are more individual. for an Insurers can statistically predict whether an individual will suffer a loss more accurately than they statistically predict whether a large number of individuals will suffer losses. d. C....