If an insured has four identical policies covering her $100,000 building, what would each insurer pay in the event of a total loss?

In a scenario where an insured holds four identical policies for a single property valued at $100,000, each insurer will contribute equally to the total coverage in the event of a total loss. The total coverage provided by the four policies amounts to $400,000 (4 policies x $100,000 each). However, since the actual value of the claim is capped at the total value of the property, which is $100,000, each insurer is responsible for an equal share of the loss.

To calculate the payout from each policy, you would divide the total property value by the number of policies. Thus, $100,000 divided by 4 results in $25,000 from each insurer. This ensures that the insured receives the total value of the property while preventing any one insurer from being disproportionately burdened by the payout. Therefore, in the case of a total loss, each insurer would pay $25,000, corresponding to the correct choice.