Homework Answers
Ans;
Answer A is correct.
90% of $100,000 = $90,000. This is what the owner should have had
at the time of loss. But the owner had $60,000. $60,000 over
$90,000 = 6/9 or 2/3 which means the owner only maintained 3/4 of
the amount of insurance he should have had. This means he will only
receive 2/3 of the amount of loss. Loss of $100,000 x 2/3 = $66,666
or Policy limit whichever is Lower
$66,666 or $60,000 which ever is lower is $60,000
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