Hello, You should probably have posted in the Accredited Claims Adjuster forum as you are taking that course.

However I was able to find the question and have the instructions and a step by step of how to answer it.

Dave’s home is valued at $200,000 replacement cost. Dave says, “No way. My house is only worth $150,000 and that’s all I’m insuring it for". So the agent writes the policy for $150,000. Later Dave has a fire resulting in $100,000 worth of damage and files the claim. How will the claim be settled?

Follow these steps (in this order) to determine coinsurance payment:
1. Multiply the value of the property by the coinsurance %    (80% = 80/100)
Step 1    200000    x    80%    =    160000
                    
2. Divide the limit of insurance by the answer from step #1    
Step 2    150000    /    160000    =    0.9375
                    
3. Multiply the loss by the answer from step #2        
Step 3    100,000    x    0.9375    =    93750

I hope this helps.  I will also be posting the steps on the page in the course for the next student.

Sandra King
Tech Support

I got it, thanks a bunch!!