Mary’s Underinsured Dwelling

Mary carries an H0-3 policy with $500,000 of coverage and a $2,000 deductible. It would cost $700,000 to rebuild Mary’s house. How much will his insurance company pay on a $150,000 claim related to a fire that started in Mary’s kitchen?

1. $119,498
2. $121,231
3. $131,928
4. $150,000