Answer:
Amount which is recovered by Robert = $253,750
Step-by-step explanation:
Co-insurance : It is a requirement by the insurance company that the property be insured to the appropriate value.
As given, The property was insured for 70% while the Co-insurance requirement was 80%.
To calculate payment ratio : First find the percentage of loss which is needed to be recovered by insurance and co - insurance requirements :
$290,000 x 0.70 = $203,000 ( Recovered through co-insurance requirement)
$290,000 x 0.80 = $232,000 ( Total amount needed to be recovered )
[tex]\text{Payment Ratio = }\frac{203000}{232000} \\\\\bf\implies \textbf{Payment Ratio = }87.5\%[/tex]
So, Amount which is recovered by Robert = $290,000 x .875 = $253,750
