Can anyone tell me the exact process for solving the Co insurance questions?
For Example, Value-$100000, Co Ins %-80, Amount of carried-$60000 Loss-$40000....What would be the lost settlement?
Could anyone break this down step by step...what you do first, second, etc? Any help would be great. Thanks.
40000 x (60000/(100000×80%)) =
40000 × (60000/ 80000) =
40000× (.75) = 30000, this is the loss settlement
David,
There are three steps to working a coinsurance problem and they must be done in this order:
1. Multiply the value of the property X the coinsurance percent ($100,000 X 80% = 80,000)
2. Divide the limit of insurance by the answer from step #1 ($60,000/$80,000 = .75)
3. Multiply the answer from step #2 by the amount of the loss ($40,000 X .75 = $30,000)
Please let me know if you have other questions.
Jan