Asked by Halel Fleming on May 11, 2024
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The owner of property valued at $150,000 insured the property for $75,000 for one year at a premium rate of $4.90 per thousand. The policy carried a 75% coinsurance clause. A fire caused $56,250 in damages. Compute the amount the property insurance and repairs for fire damage cost the insured that year.
Coinsurance Clause
A provision in insurance policies that requires the policyholder to bear a share of the loss to some specified extent.
Premium Rate
Premium Rate refers to the higher than standard price or fee charged for a product, service, or insurance policy, often in exchange for additional benefits or coverages.
Fire Damages
Loss or destruction of property resulting from fire, encompassing structural and content damage.
- Evaluate the implications of coinsurance clauses on property and casualty insurance claims through analysis and calculation.
- Evaluate the fiscal effects of various insurance programs on policyholders over successive periods.
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Learning Objectives
- Evaluate the implications of coinsurance clauses on property and casualty insurance claims through analysis and calculation.
- Evaluate the fiscal effects of various insurance programs on policyholders over successive periods.
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