Serena Purchased a Home for $220,000, Insuring It for $120,000

Serena purchased a home for $220,000, insuring it for $120,000 with Falcon Insurance. She later purchased a $60,000 policy from Devon Life. The home was totally destroyed by fire six months later. Under these circumstances, which of the following statements is true?

A) Serena can claim the entire damages, $220,000, only from Falcon Insurance as its policy amount is greater.
B) She cannot claim insurance from either as policies with pro rata clauses cover only partial losses.
C) Serena cannot recover $180,000-the total of both policies.
D) Serena cannot claim more than $60,000 from Devon Life.

Correct Answer:

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