Asked by Sumaya Hassan on May 09, 2024
Verified
Insurance Company A has a standard 90% coinsurance clause for all fire insurance coverage. Insurance Company B has a standard 75% coinsurance clause for all fire insurance coverage. A building is valued at $195,000. How much more insurance coverage would Insurance Company A require than Insurance Company B for full coinsurance coverage?
Coinsurance Coverage
A type of insurance in which the insured pays a share of the payment made against a claim.
Coinsurance Clause
A provision in insurance policies requiring policyholders to insure their property to a specified percentage of its value to receive full reimbursement for a loss.
Insurance Company
A business that provides coverage, in the form of compensation resulting from loss, damages, injury, treatment, or hardship in exchange for premium payments.
- Comprehend and utilize the principle of coinsurance to ascertain the required coverage level to prevent penalties for underinsurance.
Verified Answer
CS
Learning Objectives
- Comprehend and utilize the principle of coinsurance to ascertain the required coverage level to prevent penalties for underinsurance.