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Consider a building with replacement cost of $2 million. The commercial property insurance policy has a coinsurance requirement of 80%. If the ownerinsures the building

Consider a building with replacement cost of $2 million. The commercial property insurance policy has a coinsurance requirement of 80%. If the ownerinsures the building for $800,000, and incurs a (covered) loss of $1 million.

What will the insurance company pay out?

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