Lisa has three fire insurance policies on her office building. The pol

Lisa has three fire insurance policies on her office building. The policy from company A is for $400,000, and the policies from companies B and C are for $100,000 each.

If Lisa has a $360,000 loss, how much of the loss will be covered by each policy if the loss is settled on a pro rata basis by the insurers?
A) each policy: $120,000
B) policy A: $160,000; policies B and C: $100,000 each
C) policy A: $240,000; policies B and C: $60,000 each
D) policy A: $360,000; policies B and C: nothing

ANSWER

Answer: C