A Building is insured for $200,000 with commercial property insurance policy.

A policy has an 80% coinsurance clause.

A building had a flood and incurred a $50,000 loss.

A replacement cost of the building at the time of the flood was $500,000.


Show work, calculations, and small explanation


1. What is the insurer’s liability for the loss?


2. If the building carried a $500,000 property insurance policy whilst incurring the loss, how much would the building collect?


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