Tira Obtains Two Fire Insurance Policies on Her House

Tira obtains two fire insurance policies on her house.Each is an open policy with a pro rata clause.Tira's policy with Unity Insurance Company is for a maximum amount of $100,000.Her policy with Verity Insurance Company is for a maximum amount of $50,000.Each policy includes a pro rata clause.Due to defective electrical wiring,Tira's house catches fire and burns completely.The value the house at the time of the loss is $120,000.Tira files a proof of loss with each insurer.What is an open policy? What is a pro rata clause? What is the liability of Unity and Verity for this event?

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Under an open policy,an insurer's liabil...

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