Under a Coinsurance Provision Requiring the Building Insured for at Least

question 55

Multiple Choice

Under a coinsurance provision requiring the building insured for at least 80 percent of its value, the recovery on an insured loss of $100,000 on the building with a replacement value of $500,000 that was insured for only $300,000 would be limited to ____.

• A) $20,000
• B) $30,000
• C) $50,000
• D) $75,000

---

Definitions:

Monthly Payments

Regular payments made over a period of time, typically monthly, for loans, mortgages, or other financial obligations.

Savings Account

An account for deposits located at a bank or another financial institution, which ensures the safety of the principal amount and offers a small interest rate.

Discount Rate

It's the interest rate used in the process of discounted cash flow analysis to establish the current value of anticipated future cash flows.

Present Value

Present Value (PV) is the current worth of a future sum of money or stream of cash flows given a specified rate of return.