Root & Branch Lumber Company Obtains a Fire Insurance Policy

Multiple Choice

Root & Branch Lumber Company obtains a fire insurance policy from Security Insurance, Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Root & Branch insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. Root & Branch can recover

A) $400,000.
B) $320,000.
C) $200,000.
D) $80,000.