James moved to a new house so he rented his old home to Mr. Parker for...

James moved to a new house so he rented his old home to Mr. Parker for two years. Later the old house caught fire and had a $100,000 loss. The old house was valued at $400,000 and James had a $300,000 homeowner's insurance policy with an 80% coinsurance. How much will insurance company pay for his loss?

Expert Solution

The company will pay its share of the actual loss since the loss is lesser than the value of the house and the policy amount.

Hence amount paid by Insurance company = 80%*100,000

= $80,000

jeff jeffy answered 2 years ago

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