An Arizona homeowner makes $200,000 in insurance claim after a fire destroys their property. They paid $350,000 for the property 5 years ago (land value $80,000; building $270,000). After receiving the insurance payment and rebuilding costs of $180,000, what is their approximate net position?

Explanation

Insurance received: $200,000. Rebuild cost: $180,000. Net from insurance after rebuild: $200,000 - $180,000 = $20,000. But the original building value was $270,000, so there's still an underinsurance gap. From a pure cash perspective, they received $20,000 net from the insurance/rebuild scenario.