In the case of a 24,000 loss for a building covered by two insurers, how much will each insurer pay if company A covers 100,000 and company B covers 50,000?

In the case of a 24,000 loss for a building covered by two insurers, how much will each insurer pay if company A covers 100,000 and company B covers 50,000?

• A. Company A will pay 16,000, Company B will pay 8,000
• B. Company A will pay 12,000, Company B will pay 12,000
• C. Company A will pay 20,000, Company B will pay 4,000
• D. Company A will pay 10,000, Company B will pay 14,000

Answer: (A)

To determine how much each insurer will pay in the case of a total loss of $24,000 for a building, we need to assess the coverage limits and how they relate to the loss. Company A has a coverage limit of $100,000, and Company B has a coverage limit of $50,000. Together, the total coverage available from both companies is $150,000. Therefore, the loss is shared proportionally based on the amount of coverage each insurer provides relative to the total coverage. To find out how much each insurer will contribute, we first calculate the total proportional coverage: - Company A's share of the total coverage is $100,000 out of $150,000, which can be calculated as: \[ \frac{100,000}{150,000} = \frac{2}{3} \] - Company B's share is $50,000 out of $150,000, calculated as: \[ \frac{50,000}{150,000} = \frac{1}{3} \] Next, we apply these ratios to the total loss of $24,000: - Company A will cover: \[ 24,000 \times \frac{

To determine how much each insurer will pay in the case of a total loss of $24,000 for a building, we need to assess the coverage limits and how they relate to the loss.

Company A has a coverage limit of $100,000, and Company B has a coverage limit of $50,000. Together, the total coverage available from both companies is $150,000. Therefore, the loss is shared proportionally based on the amount of coverage each insurer provides relative to the total coverage.

To find out how much each insurer will contribute, we first calculate the total proportional coverage:

• Company A's share of the total coverage is $100,000 out of $150,000, which can be calculated as:

[ \frac{100,000}{150,000} = \frac{2}{3} ]

• Company B's share is $50,000 out of $150,000, calculated as:

[ \frac{50,000}{150,000} = \frac{1}{3} ]

Next, we apply these ratios to the total loss of $24,000:

• Company A will cover:

[ 24,000 \times \frac{