CAS Exam 5 Fall 2017, Question 14
Study guide: Exam 5
Given the following information about a homeowners insurance loss:
- Face amount of policy = $300,000.
- Value of property = $500,000.
- Coinsurance penalty = $22,000.
- Indemnity payment = $84,000.
- There is no deductible.
Part a (0.5 points)
Calculate the required coinsurance percentage.
Part b (1 point)
Identify two homeowners insurance to value initiatives insurers could implement and briefly describe how each initiative encourages insurance to full value.
Answer this question and see the worked solution