For a destroyed house worth $185,000 under a policy limit of $178,000 with a $1,800 deductible, what is Stacy's final settlement amount?

To determine the final settlement amount for Stacy, we need to consider the house's value, the policy limit, the deductible, and how these interact with the claim.

The house is valued at $185,000, but the policy has a limit of $178,000. This means that even though the value of the house exceeds the policy limit, the insurer will only cover up to the policy limit for any claim made.

When a claim is made for a loss, the deductible is also applied. In this case, the deductible is $1,800. Thus, the calculation process for the final settlement begins with the policy limit.

Starting with the policy limit of $178,000, the deductible of $1,800 is subtracted from this amount:

178,000 - 1,800 = 176,200.

However, since the question asks for the final settlement amount before considering the deductible, we return to the policy limit. Since it is still below the actual house value, the settlement does not go above the maximum limit.

Therefore, the final settlement amount that Stacy will receive, based on the policy limit, is $178,000. While the calculated amount after applying the deductible might seem like a common approach, the insurance policy