The Value of a Home Is $50,000, and the Homeowner

Multiple Choice

The value of a home is $50,000, and the homeowner policy covering it contains an 80% coinsurance clause. Assume the home is insured for $30,000 and a $12,000 loss occurs. How much will the insured recover? (Ignore the ACV calculation and assume there is no fraud or other unusual circumstances surrounding the loss.)

A) $12,000
B) $9,000
C) $16,000
D) The answer cannot be determined by the facts given.