Water damage from a major flood in a Midwestern city resulted in damages estimated at $108 million.

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Water damage from a major flood in a Midwestern city resulted in damages estimated at $108 million. As a result of the claimant payouts, insurance companies raised homeowners' insurance rates by an average of $59 per year for each of the 160,000 households in the affected city. If a 20-year study period is considered, what was the rate of return on the $108 million paid by the insurance companies?

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Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

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