Answer:
$37,500
Step-by-step explanation:
We have been given that a house worth $180,000 has a coinsurance clause of 75 percent. The owners insure the property for $101,250. They then have a loss that results in a $50,000 claim.
We will use loss settlement formula to solve our given problem.
[tex]\text{Loss settlement}=\frac{\text{Loss}\times\text{Limit of insurance}}{\text{Actual cash value}\times \text{Coinsurance}\%}[/tex]
Upon substituting our given values, we will get:
[tex]\text{Loss settlement}=\frac{\$50,000\times\$101,250}{\$180,000\times 75\%}[/tex]
[tex]\text{Loss settlement}=\frac{\$50,000\times\$101,250}{\$180,000\times 0.75}[/tex]
[tex]\text{Loss settlement}=\frac{\$5,062,500,000}{\$135,000}[/tex]
[tex]\text{Loss settlement}=\$37,500[/tex]
Therefore, they will receive $37,500 from insurance.
