Bob's home is insured for $100,000 under a dwelling policy. After suffering $20,000 damage from a fire, it was struck by lightning, completely destroying the structure. Bob's policy will pay:

In this scenario, Bob's dwelling policy has a coverage limit of $100,000. After the fire damage of $20,000, the policy still covers the entire value of the insured property, which is the $100,000 limit. Since the lightning strike completely destroyed the structure, the policy will pay out the full amount insured, because dwelling policies typically cover the total loss up to the limit of the policy regardless of whether there have been previous claims, as long as the total damage does not exceed the policy limit.

This means Bob will receive the full policy limit of $100,000 to compensate for the total loss of the home caused by the lightning strike. The previous $20,000 fire damage does not affect the maximum payout for the total loss in this situation, as the lightning event effectively resets the basis for the total claim back to the full coverage amount.