The coinsurance clause in a fire insurance policy:

A. allows the insured to recover more than the face value of the policy if the loss is total.
B. requires the insured to insure the property to a specified percentage of its fair market value in order to fully recover the value of partial losses.
C. requires the insured to pay up to a certain amount each year before the insurer's payment obligation begins.
D. allows the insured to recover the difference between the limits stated in the policy and the fair market value of the property.


Answer: B

Business

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