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Molly Huddleston
on Dec 18, 2024

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Henderson owned a concrete block building valued at $20,000. Because it was virtually fireproof, he insured it for only $10,000 under a policy of insurance which contained an 80% co-insurance clause. Some time later, the building was damaged by fire. Assuming that the fire completely destroyed the building, Henderson would only be entitled to claim for $10,000 under his insurance policy.

Co-insurance Clause

A provision in insurance policies that requires the policyholder to bear a portion of the costs of a claim, encouraging insured parties to not underinsure their assets.

Fireproof

A property or material that is resistant to or capable of withstanding damage from fire.

Insured

The individual or entity covered under an insurance policy and protected against specified risks or losses.

  • Comprehend the effects of co-insurance clauses on the processing of claims and the disbursement of indemnity payments.
  • Gain insight into the indemnity doctrine and its impact on insurance claims processing.
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MG
Mavrick GildyardDec 25, 2024
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