unit 2 sections 2.6c and 2.6d
by Adlin Augustin - Im having trouble on understanding how the formula works with the two questions asked in the units. I put the numbers into the formula, but Im not coming up with the correct answer can someone help please
Re: unit 2 sections 2.6c and 2.6d
by Jan Bradburn- - Adlin,
I believe this is the question you referenced...
Determine the amount of settlement if an insured has $60,000 insurance coverage on a building that is valued at $100,000. An 80% coinsurance applies. A $24,000 loss occurs.
Using the coinsurance formula you
1. multiply the value of the property by the coinsurance % = 80,000
2. divide the limit of insurance by 80,000 = .75
3. multiply the loss by .75 = 18,000
The coinsurance formula is listed in the state manual on page 34 and it is also listed in the course. If you follow steps 1-3 in this order, you will get the correct answer.
Let me know how it works.
Jan