General Lines Property and Casualty Insurance Practice Exam

Question: 1 / 400

In contribution by equal shares, if one insurer pays 20,000, what would the other insurer typically pay for a total loss of 40,000?

10,000

20,000

In a contribution by equal shares scenario, insurers involved in a claim typically share the loss equally, up to the limits of their respective policies. In this case, if one insurer has already paid $20,000 towards a total loss of $40,000, it indicates that this insurer is contributing to half of the loss.

Given that the total loss is $40,000 and there are two insurers expected to contribute equally, each insurer would be responsible for half of that amount, which is $20,000. Since one insurer has already paid $20,000, the other insurer would naturally pay the same $20,000 to fulfill its equal share obligation, bringing the total paid by both insurers to $40,000.

This principle ensures that both insurers are sharing the financial responsibility equally, up to the policy limits they each hold. Therefore, the other insurer would also typically pay $20,000 in this situation.

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40,000

None of the above

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