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Lisa has three fire insurance policies on her office building

Accounting

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Lisa has three fire insurance policies on her office building. The policy from company A is for

$400,000, and the policies from companies B and C are for $100,000 each. If Lisa has a $360,000 loss,

how much of the loss will be covered by each policy if the loss is settled on a pro rata basis by the

insurers?

A). each policy: $120,000

B). policy A: $240,000; policies B and C: $60,000 each

C). policy A: $160,000; policies B and C: $100,000 each

D). policy A: $360,000; policies B and C: nothing