How much will the team insurer pay for the loss


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Q: The Lincoln Saltdogs is a professional minor league baseball team in the American Association League. The clubhouse is insured for $600,000 under a commercial property insurance policy with an 80% coinsurance clause. The current replacement cost of the clubhouse is $1 million. After a playoff game for the league championship, a whirlpool tub for the players shorted out, and a fire ensued. The clubhouse sustained a $100,000 fire loss. Ignoring any deductible, how much will the team's insurer pay for the loss?

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Accounting Basics: How much will the team insurer pay for the loss
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