Question: An auto dealer is using the reported values approach for determining premium for its Auto Dealers Coverage Form. The dealer reported an inventory value of

An auto dealer is using the reported values approach for determining premium for its Auto Dealers Coverage Form. The dealer reported an inventory value of $3 million to its insurer on its most recent report. The actual value of its inventory was $4 million. There was a hailstorm that caused $500,000 damage to the dealer's autos. Disregarding any applicable deductible, how much will the insurer pay for this loss?

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