What would be the maximum payable for a 47-day loss if an insured purchased a $200,000 extra expense policy?

When assessing the maximum payable for a 47-day loss under a $200,000 extra expense policy, it is important to understand how extra expense coverage functions. This type of policy is designed to reimburse the insured for expenses incurred in order to continue operations after a covered loss, such as a fire or natural disaster.

The key factor is determining the maximum amount the insurer will cover based on a given timeframe and the total limit of the policy. In this scenario, the insured has a policy limit of $200,000. The loss duration is 47 days which influences how expenses accrue over that period.

Typically, extra expense policies are structured to cover a percentage of the total limit for each day of loss. For example, if the policy pays a maximum of a certain percentage of the coverage limit per day, we would calculate this based on the number of days and the daily amount.

In this case, if we assume that the policy covers expenses at a rate of approximately $3,404 per day ($200,000 divided by 58 days, which is a common timeframe for a business interruption policy), over 47 days, this would indeed lead to a maximum payable amount of around $160,000, which corroborates the selected answer. This