The maximum amount a policy will pay in the event of a loss is called the:
The maximum amount a policy will pay in the event of a loss is called the:
Limits of liability.
Coinsurance amount.
Deductible.
Pro rata return.
Answer: Limits of liability.
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?
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? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B
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