Items 1 and 2 are based on the following:
In 1997, Pod bought a building for $220,000. At that time, Pod purchased a $150,000 fire insurance policy with Owners Insurance Co. and a $50,000 fire insurance policy with Group Insurance Corp. Each policy contained a standard 80% coinsurance clause. In 2001, when the building had a fair market value of $250,000, it was damaged in a fire.
How much would Pod recover from Owners if the fire caused $180,000 in damage?
- $ 90,000
- $120,000
- $135,000
- $150,000
How much would Pod recover from Owners and Group if the fire totally destroyed the building?
- $160,000
- $200,000
- $220,000
- $250,000