CAS Exam 5 Fall 2019, Question 14
Study guide: Exam 5
Given the following:
| Item | Value |
|---|---|
| Home Value | $300,000 |
| Insured Value | $250,000 |
| Amount of Loss | $260,000 |
Part a (1 point)
Calculate the amount paid by the policyholder at the time of loss under the following:
i. Coinsurance percentage of 80%
ii. Coinsurance percentage of 90%
Part b (0.5 points)
Describe how coinsurance provisions promote equitable rates.
Part c (0.5 points)
Describe how coinsurance provisions promote adequate rates.
Answer this question and see the worked solution