Lily owns a home and has it insured on an

HO-3

policy in the amount of

$100,000

with a

$500

deductible. She suffers a covered

$10,000

loss to the dwelling, and the claims adjuster determines the replacement cost of the home at the time of the loss was

$250,000

. Given these facts, how much if anything, will the insurance company pay for Lily's loss? (Your answer should contemplate the loss settlement condition contained in the HO policy.)

Lily owns a home and has it insured on an HO3 policy in the amount of $100,000 with a $500 deductible. She suffers a covered $10,000 loss to the dwelling, and the claims adjuster determines the replacement cost of the home at the time of the loss was $250,000. Given these facts, how much if anything, will the insurance company pay for Lily's loss? (Your answer should contemplate the loss settlement condition contained in the HO policy.)