An insured's building has an ACV 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?
Insured only carried 75% of insur. he agreed to carry ($120,000 of the agreed $160,000), the insurer pays only 75% of the loss, or $30,000. If the insured had carried the required amount of insurance partial losses would be pd in full. In the event of a total loss, the face of the policy would be paid. If the full amount is not carried, divide the actual amount carried by the amount that should be carried (the coinsurance amount), and multiply it by the loss.