Abby Ellen's toy store is worth $412,500 and is insured for $221,100

Accounting Aug 10, 2020

Abby Ellen's toy store is worth $412,500 and is insured for $221,100. Assume an 80% coinsurance clause and that a fire caused $194,500 damage. What is the liability of the insurance company? Liability

Expert Solution

Liability	=	(Actual amount of insurance / Required amount of insurance) x Amount of loss
	=	($ 221100 / $ 330000) x $ 194500
	=	$ 1,30,315.00

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