An insured owns a house that is 5 years old. He insured the building for replacement cost of $1,000,000. A few months into the policy year, the building suffers a substantial fire loss, and the insured files a claim for $500,000. If the estimated value of the building at the time of loss is $1.25 million; What is the insurance recovery after a $5,000 deductible given the that a 80% coinsurance condition exist?

$500,000

$1,000,000

$495,000

$995,000