The Owner of Property Valued at $140,000 Insured the Property

question 29

Short Answer

The owner of property valued at $140,000 insured the property for $90,000 for one year at a premium rate of $4.80 per thousand. The policy contained a 90% coinsurance clause. A fire caused $63,000 in damage. How much more did the insurance company pay the property owner for repairs for fire damage than the property owner paid the insurance company in premiums that year?​

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Definitions:

Violating

The act of breaking rules or norms, or failing to comply with legal or moral standards.

Shadow Price

A monetary value assigned to currently unused resources, indicating the potential benefit if the resource were fully utilized.

Sensitivity Analysis

A method used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

Resource Constraint

A limitation on the availability of resources, which can affect the completion of projects or tasks.