Preston, Alex and George recently purchased a house together, and each person bought their own insurance...

Preston, Alex and George recently purchased a house together, and each person bought their own insurance policy on the house. Preston bought $200,000 of coverage, Alex bought $200,000 of coverage, and George bought $100,000 of coverage. The day after they purchased their insurance policies, George’s electric guitar stereo shorted out and started a fire. The resulting damage totaled $40,000. How much of the loss did George's insurance company pay, assuming that all three policies contained pro?rata
clauses?

16,000

24,000

40,000

8,000

Expert Solution

loss to be paid by George's insurance cmpany = 40000 * 100000/500000

loss to be paid by George's insurance cmpany = 40000 * .20

loss to be paid by George's insurance cmpany = 8000

jeff jeffy answered 2 years ago

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