Answer:
Insurer will pay to Amanda $69312.50
Explanation:
As we know that Amanda home replacement value which means the (Property value) is $400,000 and Amanda carries a coverage of amount $300,000 which is her policy limit. Her policy has 80% of coinsurance and snow storm causes a damage of amount $75,000. She has the $1,000 deductible in her policy.
80% of the 400,000 = 320,000
Amanda should have $320,000 but carries the insurance coverage $300,000
So she will get 300,000/320,000= 0.9375
In this scenario as the damage amount is $75,000 she will get $75,000 x 0.9375 which is equal to $70,312.50
Since the deductible amount of her policy is $ 1000 Which will therefore be deducted
Hence $70312.50 - $1000 = $69312.50
Amanda will get $69312.50
