Real Estate Math
A South Carolina home is insured at 80% of its $400,000 replacement cost. If there is a $160,000 fire loss, how much will insurance pay under the co-insurance formula?
A$128,000
B$140,000
C$160,000
D$320,000✓ Correct
Explanation
If insured to 80% of replacement cost ($320,000 coverage on $400,000 replacement), and the required coverage = $400,000 × 80% = $320,000. Actual coverage = $320,000.
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