Assume That the Physical Property of a Business Is Valued

Multiple Choice

Assume that the physical property of a business is valued at $50,000. The company's commercial property policy contains a coinsurance clause with a stated percentage of 80 percent. The company insures the property for $30,000 (75 percent of the specified minimum) . The company incurs a fire loss of $20,000. How much of the loss will the insurance company pay for?

A) $0
B) $15,000
C) $20,000
D) $10,000