Gerry owns a house valued at $260 000. Being frugal, he only insures it for $195 000. One night while he

is out, a fire breaks out in his laundry room. The local fire department was quickly on the scene and

were able to extinguish the fire. The damage done totaled $80 000.

Gerry thought his insurance company, ACME Insurance, would cover the entire cost of the damage. He

was informed, however, that his policy included a co-insurance clause.

ACME's liability will amount to ___________

(round to 2 decimal places)

Gerry's liability will amount to ____________

Same as above, but the co-insurance clause specifies that Gerry is required to have 80% coverage.

ACME's liability will amount to ____________

(round to 2 decimal places)

Gerry's liability will amount to______________

Gerry owns a $100 000 house. It is insured for $80 000 by ACME, and there is an 80% co-insurance

clause. Fire causes $100 000 in damage.

ACME's liability will amount to _______________

(round to 2 decimal places)