Exam DISC-IA Practice Question 41
Study guide: Exam DISC-IA
When a commercial building's policy began, its limit was exactly 80% of the building's value, with an 80% coinsurance clause. Construction costs then rose 10% before a partial fire loss in the tenth month. Which statement about the coinsurance clause is correct?
- A) A penalty applies, because the requirement uses the value at the time of loss
- B) No penalty applies, because the requirement was met when the policy began
- C) No penalty applies, because an 80% clause never penalizes a partial loss
- D) A penalty applies only if the loss is larger than the limit of insurance
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