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1. Culbreath Company purchased a building to store finished goods. They insured the building for...

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Finance

1. Culbreath Company purchased a building to store finished goods. They insured the building for $150,000 under a property insurance policy that included an 80 percent coinsurance clause and a $500 deductible. When the building was valued at $200,000 it was damaged by a fire. The damage was $50,000. Assuming fire is a covered peril, how much will Culbreath Company receive from their insurer to settle this claim?

2. Jennings Company has a general liability insurance policy with Insurer #1 with a $50,000 per-occurrence limit. Jennings has a second general liability insurance policy with another insurer (Insurer #2) with a $250,000 per-occurrence limit. A customer was injured at a Jennings store, and Jennings was ordered pay $90,000 in damages to the injured customer. Assuming both policies would cover the claim, how would the claim be settled on a pro-rata liability basis? Clearly indicate how much would be paid under Policy #1 and under Policy #2.

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