Question

Connie and sam's detached garage was recently destroyed by a tornado. their house was insured for $135,000, and the detached structures coverage was 10 percent of the insured value of the home. the loss to the garage was valued at $15,000. the insurance company would pay ____ less the deductible on this loss.

Answer 1

The correct answer is $13,500

The insurance coverage for the garage will cover the garage for 10% of the insured value of the home. This is calculated by multiplying .1 x $135,000 = $13,500.

Even though there is $15,000 in damage, the garage is only covered for $13,5000 of insurance.