David owns a commercial building with a replacement cost of 4 million. The building is insured on a replacement cost basis for 2.4 million under a fire insurance policy that has an 80 percent coinsurance clause.
How much will David collect if the building sustains a covered fire loss with a replacement cost of 80,000?
A) 50,000
B) 60,000
C) 66,667
D) 80,000
Question 2
Deductibles are not used in which of the following type of insurance?
A) life insurance
B) health insurance
C) property insurance
D) disability income insurance
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