The Property of Vin's Garage Is Worth $400,000

question 22

Short Answer

The property of Vin's Garage is worth $400,000. Vin has a fire insurance policy of $160,000 that contains an 80% coinsurance clause. What will the insurance company pay on a fire that causes $180,000 of damage? If Vin met the coinsurance, how much would the insurance company pay?

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Definitions:

Statistical Precision

How similar the results are when measurements are taken repeatedly in unaltered circumstances.

T-statistic

A value derived from a T-test that measures the size of the difference relative to the variation in the sample data.

Statistical Probability

A measure of how likely an event is to occur based on available data or statistical analysis.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis; it is dependent on the chosen significance level.