Asked by Monique Duplessis on May 20, 2024
Verified
A $40,000 fire insurance policy covers a building, which is valued at $50,000, and there is an 80% co-insurance clause. If the building is totally destroyed by fire, the policyholder will receive:
A) $50,000.
B) $40,000.
C) $32,000
D) $8,000
Co-Insurance Clause
A provision in insurance policies that requires the insured party to bear a portion of the loss, promoting the insured's interest in the property's safety.
Fire Insurance
A type of property insurance that covers damage and losses caused by fire.
Policyholder
An individual or entity who owns an insurance policy and is entitled to coverage and benefits under the policy terms.
- Recognize the diverse categories of insurance and understand the foundational principles of coinsurance.
Verified Answer
Learning Objectives
- Recognize the diverse categories of insurance and understand the foundational principles of coinsurance.
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