An insured has a special form dwelling policy written for $100,000 on a dwelling. The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling, $15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will the policy pay for the trees? A. $5,000B. $10,000C. $60,000D. $75,000

Question

Arias

Business

9 June, 07:34

An insured has a special form dwelling policy written for $100,000 on a dwelling. The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling, $15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will the policy pay for the trees? A. $5,000B. $10,000C. $60,000D. $75,000

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Answers (1)

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Creedence · Answer 1

B. $10,000

Explanation:

Amount insured = 100000.

This is the maximum amount payable.

So replacement cost which is higher can not be paid.

payable damage

= 75000 as damage due to fire +

15000 as damage to a separate garage

Total payable

= 90000

The rest of amount that is

100000 - 90000

= 10000 can be paid as damage for the trees.