A building under construction was insured on a completed value basis for $500,000 under the builders Risk Coverage Form. A $5,000 deductible applied. Shortly after the building was completed, and before it was occupied, it sustained a $120,000 loss by an insured peril. If the actual cash value of the building at the time of loss was $600,000, how much would the insurer be obligated to pay on the loss?
[($500,000/$600,000) x $120,000] - $5,000 = $95,000