The roberts carry a property insurance policy which covers 70% of the replacement cost of their insurable property, valued at $360,000. they have an 80% co-insurance requirement in the policy. if the family incurs a $290,000 loss, what amount will the roberts recover? $253,750 $290,000 $331,429 $203,000

Amount which is recovered by Robert = $253,750

Step-by-step explanation:

Co-insurance : It is a requirement by the insurance company that the property be insured to the appropriate value.

As given, The property was insured for 70% while the Co-insurance requirement was 80%.

To calculate payment ratio : First find the percentage of loss which is needed to be recovered by insurance and co - insurance requirements :

$290,000 x 0.70 = $203,000 ( Recovered through co-insurance requirement)

$290,000 x 0.80 = $232,000 ( Total amount needed to be recovered )

So, Amount which is recovered by Robert = $290,000 x .875 = $253,750