The inventory at Frank's business fluctuates. Frank's property insurance requires periodic reporting of inventory values. Frank believes he can save money by under-reporting the inventory. Last period, Frank reported $200,000 when he value was really $400,000. Shortly after filing report, when the value was $500,000, the inventory was destroyed. How much will Frank's insurer pay, assuming no deductible?

The inventory at Frank's business fluctuates. Frank's property insurance requires periodic reporting of inventory values. Frank believes he can save money by under-reporting the inventory. Last period, Frank reported $200,000 when he value was really $400,000. Shortly after filing report, when the value was $500,000, the inventory was destroyed. How much will Frank's insurer pay, assuming no deductible?




A) nothing, as underreporting voids coverage
B) $200,000
C) $250,000
D)$400,000


Answer: C

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