If a 15 year old dwelling valued at $100,000 is insured for $60,000 on an HO-3 policy with a $250 deductible and incurs a $10,000 loss, how much will the insured receive from the insurance company?

To determine how much the insured would receive from the insurance company after a $10,000 loss under an HO-3 policy, it is crucial to look at the coverage limits and the deductible amount.

Firstly, the dwelling is insured for $60,000, which is below its full replacement value of $100,000. Thus, it is essential to apply the principle of actual cash value and the applicable deductible. In the event of a partial loss (which $10,000 is in this case), the insured's payout is calculated as follows:

1. Calculate the loss minus the deductible: The total loss is $10,000, and there is a $250 deductible. To find the payout, subtract the deductible from the loss: [ 10,000 - 250 = 9,750 ]

2. Evaluate the coverage amount: Since the dwelling is insured for $60,000, which is above the $9,750 calculated after applying the deductible, the coverage limit does not restrict the payout in this case.

Therefore, the insured would receive $9,750, which reflects the amount of loss minus the deductible while staying within the policy limits.