The ABC Corporation owns a $100,000 building.If its policy contains an 80% coinsurance clause, The maximum amount of insurance that Cooperation should carry to collect fully on $10,000 loss is $10,000 $80,000 $90,000 $100,000

The ABC Corporation owns a $100,000 building.If its policy contains an 80% coinsurance clause, The maximum amount of insurance that Cooperation should carry to collect fully on $10,000 loss is $10,000 $80,000 $90,000 $100,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Property Insurance

Property insurance protects property from unforeseeable loss or damage and covers property owners' liability. Property insurance provides financial compensation to the property owner or renter in the event of damage or theft, as well as to someone other than the owner or renter if that person is injured on the property. Property insurance covers all risks of damage caused by theft, fire, flood, cyclones, lighting, and natural calamities, among other things. The primary goal of property insurance is to require the property owner to cover the loss. A monthly premium is paid to the insurance company, and in exchange, the insurance company pays for damage based on the agreement stated in the policy. Property insurance protects assets such as a vehicle, auto, car, rental home, house, and valuable property.

Question

The ABC Corporation owns a $100,000 building.If its policy contains an 80% coinsurance clause, The maximum amount of insurance that Cooperation should carry to collect fully on $10,000 loss is

$10,000
$80,000
$90,000
$100,000

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