Camera shop occupies a leased building. On december 10, a fire totally destroyed the building and its contents. The ACV of the contents was $1,050,000. Camera Shops persol property was insured under a BPP with the Value Reporting Form with a $900,000 limit and a monthly reporting requirement. the policy had been in force since August 1. At the time of the loss, Camera Shop had made the following monthly reports of values:
8/31 - $793,000; 9/30 - $910,000; 10/31 - $1,100,000
Because these reports were accurate and made on time, Camera Shop believed that it was entitled to receive payment of $1,050,000, which was less than the amount last reported. Disregarding any deductible, how much will camera Shop be able to recover under its value reporting coverage? Explain.
Camera Shop should be able to recover $90,000. Although its reports of values were timely and accurate, camera Shop cannot recover any more than the limit of insurance. To make sure the peak values will be recovered, Camera Shop should set the limit high enough to cover any anticipated seasonal increase.