1) If the owner of a building worth $ 8,089,231,567 buys $ 7,100,957,500 of insurance on a policy with a 90% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 156,755,555, the amount of the loss the insured would have to pay will be
a) $ 152,893,870
b) $ 142,019,150
c) $ 3,861,685
d) $ 1,556,975
2) If the owner of a pet store worth $ 350,000 buys $ 200,000 of insurance on a policy with an 85% coinsurance clause and a $6,000 coinsurance waiver, then suffers a loss of $ 62,000, his recovery under the policy (rounded to the nearest $ 1,000) will be
a) $ 35,000
b) $ 42,000
c) $ 45,000
d) $ 63,000
3) Tiger Woods owns a house worth $ 4,000,000. He insures it for $2,000,000 under a policy with an 80% coinsurance clause. He suffers a fire loss of $ 500,000. How much (rounded to the nearest $ 100) of the loss would he have to pay?
a) $ 190,000
b) $ 187,500
c) $ 312,500
d) $ 310,000
4) If the owner of a building worth $ 450,000 buys $ 300,000 of insurance on a policy with an 85% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 6,001, the amount of the loss he would have to pay will be
a) $ 4,000
b) $ 4,700
c) $ 1,300
d) $ 2,000
5) If the owner of a building worth $ 400,000 buys $ 300,000 of insurance on a policy with an 80% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 6,000, the amount of the loss (rounded to the nearest $ 100) she would have to pay will be
a) $ 5,600
b) $ 6,000
c) $ 0
d) $ 4,000
6) If the owner of a building worth $ 1,000,000 buys $ 600,000 of insurance on a policy with a 70% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 66,000, his recovery under the policy (rounded to the nearest $ 1,000) will be
a) $ 57,000
b) $ 66,000
c) $ 70,000
d) $ 55,000
7) If the owner of a building worth $ 900,000 buys $ 750,000 of insurance on a policy with a 90% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 300,000, the amount of the loss (rounded to the nearest $ 100) she would have to pay will be
a) $ 22,200
b) $ 297,400
c) $ 277,800
d) $ 24,500
8) If the owner of a building worth $ 325,000 buys $ 225,000 of insurance on a policy with an 80% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 1,300, the amount of his recovery (rounded to the nearest $ 100) will be
a) $ 1,125
b) $ 1,300
c) $ 1,000
d) $ 0
9) Rico owns a building worth $ 500,000 and buys $ 400,000 of insurance on a policy with an 80% coinsurance clause and a 3% coinsurance waiver. The place blows up resulting in a loss of $ 500,000. His recovery under the policy will be
a) $ 400,000
b) $ 500,000
c) $ 781,250
d) $ 460,000
10) If the owner of a building worth $ 275,000 buys $ 200,000 of insurance on a policy with an 80% coinsurance clause, then suffers a loss of $ 120,000, the amount of the loss he would have to pay will be
a) $ 10,000
b) $ 10,900
c) $ 109,100
d) $ 120,000
11) If the owner of a building worth $ 1,163,000 buys $ 900,000 of insurance on a policy with an 80% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 350,000, the amount of the loss (rounded to the nearest $ 1) he would have to pay will be
a) $ 11,000
b) $ 12,576
c) $ 11,436
d) $ 14,822
e) $ 338,564
12) If the owner of a building worth $ 250,000 buys $ 200,000 of insurance on a policy with a 90% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 12,000, his recovery under the policy (rounded to the nearest $ 100) will be
a) $ 12,000
b) $ 10,700
c) $ 10,500
d) $ 9,000
13) If Bill Gates owns a building worth $ 385,000,000 buys $ 250,000,000 of insurance on a policy with an 80% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 300,000,000, his recovery (rounded to the nearest $ 1,000,000) under the policy will be
a) $ 250,000,000
b) $ 5,000,000
c) $ 244,000,000
d) $ 300,000,000
14) If the owner of a building worth $ 600,000 buys $ 450,000 of insurance on a policy with an 85% coinsurance clause, then suffers a loss of $ 100,000, the amount of the loss (rounded to the nearest $ 100) he would have to pay will be
a) $ 36,300
b) $ 88,200
c) $ 63,800
d) $ 11,800
15) If the owner of a building worth $ 125,000 buys $ 90,000 of insurance on a policy with an 80% coinsurance clause, then suffers a loss of $ 50,000, his recovery under the policy will be
a) $ 45,000
b) $ 50,000
c) $ 90,000
d) $ 42,500
16) If the owner of a building worth $ 300,000 buys $ 200,000 of insurance on a policy with an 80% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 8,000, his recovery under the policy (rounded to the nearest $ 100) will be
a) $ 5,300
b) $ 6,700
c) $ 7,400
d) $ 8,000
17) If the owner of a building worth $ 125,000 buys $ 100,000 of insurance on a policy with a 90% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 20,000, his recovery under the policy will be approximately
a) $ 20,000
b) $ 17,800
a) $ 8,800
b) $ 4,000
18) If the owner of a building worth $ 200,000 buys $ 150,000 of insurance on a policy with a 90% coinsurance clause and a 2% Waiver of Coinsurance clause and then suffers a loss of $ 8,000, his recovery under the policy (rounded to the nearest $ 100) will be
a) $ 5,000
b) $ 6,400
c) $ 6,700
d) $ 8,000
19) If the owner of a building worth $ 200,000 buys $ 150,000 of insurance on a policy with a 90% coinsurance clause and a 2% Waiver of Coinsurance clause and then suffers a loss of $ 12,000, his recovery under the policy will be approximately
a) $ 9,600
b) $ 10,000
c) $ 10,800
d) $ 12,000
20) If the owner of a building worth $ 150,000 buys $ 90,000 of insurance on a policy with an 80% coinsurance clause, then suffers a loss of $ 60,000, his recovery under the policy will be
a) $ 42,500
b) $ 45,000
c) $ 60,000
d) $ 90,000
Suggested Answer Key
1) c 11) c
2) b 12) b
3) b 13) a
4) c 14) d
5) c 15) a
6) a 16) b
7) a 17) b
8) b 18) c
9) a 19) b
10) b 20) b
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