Asked by Charlease Jordan on Jul 12, 2024
Verified
Where a person owns a half interest in a house valued at $200,000 and has insurance on that property in the amount of $400,000, if the house burns down, causing a loss of $100,000, how much will that person collect?
A) $50,000
B) $100,000
C) $200,000
D) $400,000
E) Nothing
Co-Insurance Clause
A provision in an insurance policy that requires the policyholder to bear a portion of the loss in return for a lower premium.
Insurance Claimed
Insurance claimed involves a request for payment based on the terms of an insurance policy, following a loss, damage, or occurrence covered by the policy.
Actual Value
The true or genuine value of an asset or property, based on factual evidence and market conditions.
- Acknowledge the tenets directing insurance contracts, the retrieval of claims, and the clarification of uncertain conditions favoring the policyholder.
Verified Answer
JO
Jaden OteroJul 15, 2024
Final Answer :
A
Explanation :
The person will collect $50,000, which is half of the $100,000 loss, matching their half interest in the property. Insurance payments are based on the actual loss up to the policy limit, not exceeding the owner's interest in the property.
Learning Objectives
- Acknowledge the tenets directing insurance contracts, the retrieval of claims, and the clarification of uncertain conditions favoring the policyholder.