. The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay?

Company A will pay $16,000 and Company B will pay $8,000.

Explanation:

Pro rata method means allocating the amount to each company according to their percentage amount.

Here in this case,

Total Insurance amount = $100,000+50,000 = $150,000

Company A share if $24,000 loss occurs:

= $ 16,000

Company B share if $24,000 loss occurs:

= $ 8,000

Hence , Company A will pay $16,000 and Company B will pay $8,000.

do u have any choices