An insurance contract is designed to be all of the following in the event of a claim, EXCEPT:

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An insurance contract is designed to be all of the following in the event of a claim, EXCEPT:

A. A financial mechanism that can benefit policyholders and other claimants

B. A means to provide a profit to the insured

C. A means to afford peace of mind to the insured

D. A way to restore a claimant to pre-loss condition

Answer: B

AINS Chapter 6

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

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