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(3 marks) Last week a small fire in the display area of Adanac Shoes Ltd, resulted in a loss of 30 pairs of shoes. The total value claimed for the loss was $1,200. The amount of insurance carried on stock is $75,000. The actual cash value of the Adanacs stock at the time of the loss was $120,000. The Adanac's insurance policy contains an 80% co-insurance clause. The insurance adjuster offered the Adanacs $937.50 for their loss. This amount was arrived at after calculation of the loss as follows: Co-insurance Clause (Formula) X Loss = Settlement Did Should $75,000 $96,000 x $1,200 = $937.50 (a) (1 mark) The adjuster has made an error in the making of this settlement offer. Identify the provision contained in the Co-insurance Clause which you would use to show the adjuster that the above settlement offer is insufficient. (1 mark) What amount should the adjuster have offered the Adanacs for their loss? c) (1 mark) If the loss had been $3,000 how much would be paid under the policy? (3 marks) Last week a small fire in the display area of Adanac Shoes Ltd, resulted in a loss of 30 pairs of shoes. The total value claimed for the loss was $1,200. The amount of insurance carried on stock is $75,000. The actual cash value of the Adanacs stock at the time of the loss was $120,000. The Adanac's insurance policy contains an 80% co-insurance clause. The insurance adjuster offered the Adanacs $937.50 for their loss. This amount was arrived at after calculation of the loss as follows: Co-insurance Clause (Formula) X Loss = Settlement Did Should $75,000 $96,000 x $1,200 = $937.50 (a) (1 mark) The adjuster has made an error in the making of this settlement offer. Identify the provision contained in the Co-insurance Clause which you would use to show the adjuster that the above settlement offer is insufficient. (1 mark) What amount should the adjuster have offered the Adanacs for their loss? c) (1 mark) If the loss had been $3,000 how much would be paid under the policy

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